Latest / Masters in Business / Spencer Jakab on the Death of Meme Stocks

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Spencer Jakab on the Death of Meme Stocks · Masters in Business

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  Speaker 1: This is Mesters in Business with Very Results on Bloomberg Radio.
• 0:08
  Speaker 1: Verry would helps you're listening to Masters in Business on
• 0:11
  Speaker 1: Bloomberg Radio. My special guest this week is Spencer Jacob.
• 0:16
  Speaker 1: He is an editor at the Wall Street Journals heard
• 0:19
  Speaker 1: on the Street column. Before that, he wrote the Ahead
• 0:22
  Speaker 1: of the Tape column and was the lex column author
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  Speaker 1: for The Financial Times. He just wrote a new book,
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  Speaker 1: The Revolution That Wasn't Game Stop. Read It and the
• 0:33
  Speaker 1: Fleecing of Small Investors. Spencer Jacob, Welcome to Bloomberg. Thank
• 0:39
  Speaker 1: you so. First of all, I really enjoyed the book.
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  Speaker 1: I read it on the beach this summer and a
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  Speaker 1: couple of weekends. Uh. Really reads like a fascinating novel. Um.
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  Speaker 1: If it wasn't a work of nonfiction, it could never
• 0:54
  Speaker 1: have been made into a work of fiction because it
• 0:58
  Speaker 1: just wouldn't be believable with it. It's crazy, right It's
• 1:01
  Speaker 1: it lends itself to a to a book, and I
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  Speaker 1: knew that right away. When the story began to unfold,
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  Speaker 1: I sent an email. I had a three quarters written
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  Speaker 1: book proposal about something else, sitting at home during the pandemic,
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  Speaker 1: and I wrote an email to the acquisitions editor Penguin
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  Speaker 1: random House person. I don't even know. I didn't know then,
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  Speaker 1: and when I saw this story begin to unfold, I
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  Speaker 1: had first article had not been written about it. One
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  Speaker 1: of my sons, let me stop you and and just
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  Speaker 1: say the book came about and please pardon my language,
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  Speaker 1: because your son's self describe themselves as degenerates, apes and retards.
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  Speaker 1: Can you explain why a group of people would self
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  Speaker 1: describe themselves that way. So I have three sons, and
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  Speaker 1: two of them are are very online. They're all online,
• 1:54
  Speaker 1: but two of them are very online. They are on
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  Speaker 1: read It all the time. And they were on this
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  Speaker 1: forum on Reddit called Wall Street Bets, which was at
• 2:03
  Speaker 1: the epicenter of this story and the people on this forum.
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  Speaker 1: It's an investing forum, but not really an investing corn.
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  Speaker 1: There's a different investing forum on unreddit called r investing.
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  Speaker 1: This is our Wall Street Bets, which is an entirely
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  Speaker 1: different speculative lots of access to grind, lots of social
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  Speaker 1: issues come up. It's not a straight up investing group. Now.
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  Speaker 1: It's like Jackass for finance, That's what it is. It's like,
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  Speaker 1: you know, you do crazy stuff on there, and you
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  Speaker 1: show off crazy stuff and you. I don't know if
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  Speaker 1: a lot of the crazy stuff actually ever happens because
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  Speaker 1: you can't tell people are using pseudonyms. But they were
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  Speaker 1: all over that. And my oldest boy, he's not twenty three,
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  Speaker 1: he was a college senior when this happened, came over
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  Speaker 1: and he said, Dad, are you going to write something
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  Speaker 1: about Game Stop? And you know, so game Stop they're
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  Speaker 1: all into video games. I've driven them there lots of times.
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  Speaker 1: They were going there less and less over time, which
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  Speaker 1: is a problem with Game Stop as a business. It's
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  Speaker 1: you know, it's in a mall, it's it's old school,
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  Speaker 1: it's it's the block uster video games. Totally, totally, that's
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  Speaker 1: and that's the problem. That's why I had been losing
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  Speaker 1: money for years. That's why that's how it found itself
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  Speaker 1: at the center of the story. The book is not
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  Speaker 1: really about game Stop. And people always asked me about
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  Speaker 1: don't you think this? Don't you think that about Game Stopped?
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  Speaker 1: Like I can talk to about game stuff, But that's
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  Speaker 1: not really the interesting thing here. The interesting thing is
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  Speaker 1: this unprecedented thing that made it the most traded security
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  Speaker 1: in the world for a while, the most search term
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  Speaker 1: in the world for a while, you know, and from
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  Speaker 1: just total obscurity, and um, I said no, why you know?
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  Speaker 1: And his friend of mine, this kid who I've known
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  Speaker 1: since he was you know, my as tall as my
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  Speaker 1: knee had had bought it. And uh, I took a
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  Speaker 1: look and said, well, he's doubled his money in the
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  Speaker 1: last two days. Maybe he should sell. They're talking about
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  Speaker 1: it on Wall Street bets. And I've seen this dozens
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  Speaker 1: of times before, you know, it's a kind of a
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  Speaker 1: flash in the pan. And he I really wouldn't hang
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  Speaker 1: on too long. And and what kind of got my
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  Speaker 1: attention was he said, no, he's not going to sell. Ever,
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  Speaker 1: No he can't sell. So what I he can't sell?
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  Speaker 1: And so the you know, I started reading the board
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  Speaker 1: and I was like, oh my god, they're they're executing
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  Speaker 1: a corner on this stock. So they all sort of
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  Speaker 1: agreed online to buy as much as they could and
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  Speaker 1: not sell and then buy options to which forces further
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  Speaker 1: buying buy options dealers. So it was this trap is
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  Speaker 1: this thing that you can't really do, as you know, Barry, like,
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  Speaker 1: you can't not legally legally right when I can't get
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  Speaker 1: together and do this. But a bunch of anonymous teenagers
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  Speaker 1: and others. It wasn't just teenagers could talk about it
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  Speaker 1: in this venue without real fear of reprisal, because there
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  Speaker 1: are a bunch of little guys engaging in some speculative
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  Speaker 1: wishful thinking. That's right. And if you take at that point,
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  Speaker 1: there were about one point nine million people on the forum.
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  Speaker 1: By the end of the next month, there were eleven
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  Speaker 1: million people. So they quadrupled in in four days the
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  Speaker 1: number of people on this forum. As it just became
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  Speaker 1: people got so excited by it and so there that
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  Speaker 1: those people individually may not have had a lot of money,
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  Speaker 1: but they did two things. First all their a lot
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  Speaker 1: of them, and they all rushed in in the same
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  Speaker 1: way into the same stocks, especially game Stop. And also
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  Speaker 1: people were telling them, hey, if you want to get
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  Speaker 1: real bank for your buck, don't even buy the stock
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  Speaker 1: by way out of the money, call options on the stock.
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  Speaker 1: And then the options dealers will have to basically as
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  Speaker 1: it goes up, they'll have to buy, and they'll buy
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  Speaker 1: a lot more than the money that you put down.
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  Speaker 1: In professional terms, that's a gamma squeeze. Yes, it's a
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  Speaker 1: gama squeeze. And most of these these kids were very
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  Speaker 1: few of these kids knew what a Gama squeeze was,
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  Speaker 1: but it was all explained there. I was reading all
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  Speaker 1: about it on the board. I don't think they were
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  Speaker 1: breaking the law because they're talking about it openly, right, right,
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  Speaker 1: This this was no dark conspiracy. So so let's talk
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  Speaker 1: a little bit about Wall Street bets. When it first
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  Speaker 1: started to erupt, I think the knee jerk response, and
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  Speaker 1: I'm as guilty as anybody was. How is this any
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  Speaker 1: different than the nine nineties and Yahoo message boards and
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  Speaker 1: raging bull But there was a slightly different factor what
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  Speaker 1: made this so different than what we saw thirty years
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  Speaker 1: So you've heard it. It's a cliche by now, but
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  Speaker 1: it is true more or less that the four most
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  Speaker 1: dangerous words and investing are This time is different, right,
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  Speaker 1: And that's that's something I'm a real student of financial history.
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  Speaker 1: I was Templeton very famously said that totally, and I
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  Speaker 1: went into this with that echoing, and I had to
• 6:19
  Speaker 1: go into everything with that echoing in my head. Whenever
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  Speaker 1: there's a crash or mania or panic that people. Human
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  Speaker 1: psychology is basically unchanged since Paleolithic times, and so the
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  Speaker 1: way that that we react to something financially is never good,
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  Speaker 1: but it's always very similar. So history rhymes, doesn't repeat,
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  Speaker 1: but it rhymes that that's the reason it's it's the
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  Speaker 1: way that our our brains are wired. But this was different,
• 6:43
  Speaker 1: and tell us, tell us what was different about it.
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  Speaker 1: The difference is that private companies understand psychology too. They
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  Speaker 1: have psychologists who work for them, They have social psychologists
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  Speaker 1: who work for them, and the same people who Uh.
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  Speaker 1: You go into a Vegas casino and there are no
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  Speaker 1: fox on the wall, there are no windows. People are
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  Speaker 1: bringing you drinks. The same people who designed sports gambling
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  Speaker 1: apps and things like that, designed social media and designed
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  Speaker 1: the the brokerage apps that that these young people were
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  Speaker 1: using to access this, and they induced all kinds of
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  Speaker 1: They just put these speculative tendencies on steroids, basically is
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  Speaker 1: what they did. Social media and the investing apps together
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  Speaker 1: on the same device on your smartphone being used by
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  Speaker 1: the same people al along with Wall Street, Bets and Reddit.
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  Speaker 1: So the difference this time was different because uh, and
• 7:42
  Speaker 1: to the fact that everybody stuck at home. Most of
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  Speaker 1: us got stimulus checks, so people have cash in their
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  Speaker 1: pocket and there's no gambling, there's no sports. Their usual
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  Speaker 1: entertainment is shut down. This really seems and you describe
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  Speaker 1: it in the book as a perfect storm that teed
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  Speaker 1: up to send this, to use their parlance, to the moon. Yeah.
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  Speaker 1: I mean it's so interesting because several things had to
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  Speaker 1: happen really all at once for this to happen. Um.
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  Speaker 1: And so I trace that and explain the social forces,
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  Speaker 1: because I think that's I mean that that's how you
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  Speaker 1: tell the whole story. Uh, And it's very interesting, but
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  Speaker 1: it's also how you understand what it means going forward.
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  Speaker 1: And I want there, you know, and I hope that
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  Speaker 1: there are lessons in the book for people who invest,
• 8:31
  Speaker 1: people who invest their own money, people on Wall Street
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  Speaker 1: to take away from this, to understand how it happened,
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  Speaker 1: not that it's going to happen exactly this way again,
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  Speaker 1: because as I said, it was a perfect storm. But
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  Speaker 1: you have to go back to two thousand and eighteen
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  Speaker 1: when you had sports gambling legalized outside of Vegas in
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  Speaker 1: most of the US, and so you had all these young,
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  Speaker 1: mainly men playing daily fantasy sports. They had the apps already,
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  Speaker 1: the Vanduel Draft Kings and what have you on their phones,
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  Speaker 1: and all of a sudden they were actually gambling there's
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  Speaker 1: a legal distinction between daily fantasy sports and gambling gambling.
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  Speaker 1: It's the only type of sports that that negatively correlates
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  Speaker 1: with with age is sports gambling. Uh then then totally
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  Speaker 1: everything else is the older you are, the more likely
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  Speaker 1: are to play slots and things like that, but not this.
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  Speaker 1: Then you had um in late so you had a
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  Speaker 1: five year period when half of the new brokerage accounts
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  Speaker 1: opened in the US were opened by robin Hood, which
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  Speaker 1: is a tiny broker Even then in that data point, again,
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  Speaker 1: half of all new brokerage counts were robin Hood. Yeah,
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  Speaker 1: not in dollar value because they were tiny's The median
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  Speaker 1: value of those accounts was two forty one dollar, which
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  Speaker 1: is peanuts. But the number of accounts, that's that's something.
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  Speaker 1: And I would love to to go into how what
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  Speaker 1: made robin Hood possible? Okay, because there's some changes there.
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  Speaker 1: So let's let's just blow that right now. Why was
• 9:54
  Speaker 1: robin Hood and ps um? You know, I looked at
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  Speaker 1: robin Hood and in a seed round and I wait,
• 10:04
  Speaker 1: you want to give free trade in two millennials. This
• 10:08
  Speaker 1: is the single dumbest investing idea I've ever heard of,
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  Speaker 1: and I passed on it. What made that possible, robin
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  Speaker 1: Hood possible, where twenty years ago you couldn't have had
• 10:19
  Speaker 1: the sort of app on your phone like robin Hood. Well,
• 10:22
  Speaker 1: our our mutual friend Howard Lind'son was one of the
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  Speaker 1: early investors in robin Hood. He's the one to pitch
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  Speaker 1: me on it. Literally, Howard, that's the dumbest blank idea
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  Speaker 1: I've ever Wait, the trades are free and you're giving
• 10:36
  Speaker 1: it to the least wealthy people in the world. How
• 10:40
  Speaker 1: are they ever going to make money? Howard will video.
• 10:42
  Speaker 1: He was kind of a dummy about it too, because
• 10:44
  Speaker 1: he was smart enough to invest, but then he was
• 10:45
  Speaker 1: dumb enough to say, guys, this is a great app.
• 10:47
  Speaker 1: You should charge like a dollar or two dollars for it,
• 10:50
  Speaker 1: like people will pay that, which was totally wrong because
• 10:55
  Speaker 1: the fact that and and so you still have to
• 10:58
  Speaker 1: link it to a bank account, right, but you could
• 11:01
  Speaker 1: download it for free, and once you went through the
• 11:04
  Speaker 1: process of opening the account, that's when you found out
• 11:07
  Speaker 1: they need this info, they need your phone number, they
• 11:09
  Speaker 1: need that, they need your bank account, And before you
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  Speaker 1: know it, you've opened up your financial life completely to
• 11:17
  Speaker 1: robin Hood and your first brokerage account and it's it's
• 11:20
  Speaker 1: cost seventy bucks to get out to sort of, you know,
• 11:22
  Speaker 1: to move your account to somewhere somewhere else, so you
• 11:24
  Speaker 1: don't you liquidated and move on exactly. Yeah, that's that
• 11:30
  Speaker 1: would be the smarter thing to do. Not that their
• 11:32
  Speaker 1: customers always did the smarter thing, but we'll get into
• 11:35
  Speaker 1: that later. But yeah, so they, I mean, in late
• 11:39
  Speaker 1: every other broker said we'll screw this, you know, we're
• 11:43
  Speaker 1: if you can't, you know, can't beat them, then join
• 11:45
  Speaker 1: them and for a Schwab or fidelity that has much
• 11:48
  Speaker 1: wealthier customers. They sell all kinds of services that Robin
• 11:51
  Speaker 1: who doesn't. They're like, well, well, we're gonna lose some
• 11:54
  Speaker 1: money on this, but we have to match them. And
• 11:56
  Speaker 1: it shows you how dumb they were, because they all
• 12:00
  Speaker 1: were wringing their hands about cutting their commissions to zero.
• 12:03
  Speaker 1: It was no longer the bulk of the money they
• 12:05
  Speaker 1: made anyway, but it was still a pretty nice chunk
• 12:07
  Speaker 1: of change for them, and they thought that it would
• 12:10
  Speaker 1: cost them money, and it made them money because you
• 12:12
  Speaker 1: had an explosion in trading activity as a result of
• 12:16
  Speaker 1: everyone going to zero. And so that there's a psychological
• 12:19
  Speaker 1: concept that's not appreciated. I mean, you have you learn
• 12:22
  Speaker 1: all about e losticity of demand, and you learn that
• 12:24
  Speaker 1: that when things get cheaper, people will desire more of it.
• 12:27
  Speaker 1: But it depends what kind of thing it is. There's
• 12:29
  Speaker 1: only up to a point, only up to a point,
• 12:31
  Speaker 1: but there's a special kind of product where people once
• 12:34
  Speaker 1: you go from costing something doesn't matter how little to nothing,
• 12:39
  Speaker 1: people will go crazy that it will explode. And that's
• 12:42
  Speaker 1: specifically fun things. And so you don't think about buying
• 12:45
  Speaker 1: a stock is a fun thing, but robin Hood made
• 12:47
  Speaker 1: it fun the same dopamine hit as as gambling or
• 12:51
  Speaker 1: getting on a roller coaster or just a smidge in
• 12:54
  Speaker 1: a heroine for the weekend. Totally, and it's the same
• 12:58
  Speaker 1: thing as think about when you're you're a few years older,
• 13:01
  Speaker 1: the means, so you remember like if you had to
• 13:03
  Speaker 1: call somebody long distance. I mean, you know, my family,
• 13:06
  Speaker 1: my parents are immigrants, and we had you know, relatives
• 13:08
  Speaker 1: far away, and I remember, like, you know, the very
• 13:11
  Speaker 1: rare occasion they would spring for a phone call. Like
• 13:13
  Speaker 1: everyone had to be lined up next to the phone
• 13:16
  Speaker 1: and you got your you know, your one minute on
• 13:18
  Speaker 1: the phone and then hand the phone to the next person.
• 13:20
  Speaker 1: And then it was like, oh, they're tearing their hair
• 13:21
  Speaker 1: out about how much it would cost. Now calling anyone
• 13:24
  Speaker 1: in the world anywhere is free, and so people do
• 13:25
  Speaker 1: it all the time. You know, they do it way
• 13:27
  Speaker 1: way more than if it just cost a tiny amount
• 13:30
  Speaker 1: of money, because these there's no cost to it. There's
• 13:32
  Speaker 1: no incremental cost to it, right And and as a
• 13:34
  Speaker 1: note with Schwab, when they and they were the first
• 13:36
  Speaker 1: major broker that seemed to have introduced um free trading,
• 13:40
  Speaker 1: and that all the other dominos fell after them. When
• 13:43
  Speaker 1: you looked at their revenue the next quarter, I think
• 13:45
  Speaker 1: something like fift of their pre free um revenue came
• 13:51
  Speaker 1: from just float on cash and trading volume was really
• 13:56
  Speaker 1: really you know, high single digits, low double digit and
• 14:00
  Speaker 1: then eventually payment for order flow more than made that up.
• 14:03
  Speaker 1: So and a lot of assets flowed into them. So
• 14:06
  Speaker 1: old told this was a win win at least four
• 14:10
  Speaker 1: established Wall Street farms, and they were like, why don't
• 14:12
  Speaker 1: we wait so long to do this? This is great?
• 14:14
  Speaker 1: They were all, you know, just gushing about how smart
• 14:17
  Speaker 1: they were to do this, even though they had held
• 14:19
  Speaker 1: off on doing it for a while. And then that
• 14:22
  Speaker 1: was late. Then what happened early is you had the pandemic,
• 14:27
  Speaker 1: and the pandemic was just the perfect thing to kick
• 14:30
  Speaker 1: off the speculative excess. Of course, you you know, you'd
• 14:32
  Speaker 1: had free money for many years, basically, you know, you'd
• 14:36
  Speaker 1: had zero would real cause credit, but but literal free
• 14:40
  Speaker 1: money showing up in the mail in the form of
• 14:43
  Speaker 1: a check or a direct deposit that that kicked in
• 14:46
  Speaker 1: um in the second quarter of If you were twenty
• 14:49
  Speaker 1: three years old and you you know, had been let's say, working,
• 14:53
  Speaker 1: maybe living with friends, all of a suddenly you're mom
• 14:55
  Speaker 1: and Dad's basement. You get this check for bucks. Uh,
• 14:59
  Speaker 1: you might be getting extended unemployment benefits. Uh, you're not
• 15:03
  Speaker 1: spending money going out every night. You know, you're at
• 15:05
  Speaker 1: the age where you you spend money as soon as
• 15:07
  Speaker 1: you make it. All of a sudden, you weren't your board.
• 15:09
  Speaker 1: You're sitting there looking at your phone for twelve hours
• 15:11
  Speaker 1: a day, and you're looking you're looking at social media.
• 15:14
  Speaker 1: All of a sudden, all these new social media people
• 15:16
  Speaker 1: are popping up talking about stocks, the stock market. You know,
• 15:19
  Speaker 1: there's this whole rise of of influencers, and so you
• 15:22
  Speaker 1: go and you know, your buddy tells you to open
• 15:24
  Speaker 1: up a robin Hood account, and you open up robin
• 15:26
  Speaker 1: Hood account because he already has a robin Hood account,
• 15:28
  Speaker 1: and he'll get he got a free shriff stock when
• 15:31
  Speaker 1: he opened it, and he'll get another free shaff stock. Mystery,
• 15:34
  Speaker 1: Like it's like a sweepstakes because it could be a
• 15:37
  Speaker 1: two dollar stock, but it could possibly be a fifty
• 15:39
  Speaker 1: dollar stock. Right, you don't know, it's it's it's like
• 15:42
  Speaker 1: you know, I mean, it's like, that's a cheap cost
• 15:45
  Speaker 1: of acquisition for a brokerage firm. Right. All told, the
• 15:49
  Speaker 1: average payback period was five months for that investment, so
• 15:52
  Speaker 1: they didn't really need to add. They did have advertisements,
• 15:55
  Speaker 1: and their advertisements were really kind of too kind of um,
• 15:58
  Speaker 1: you know, make themselves look it. Basically, it wasn't to
• 16:00
  Speaker 1: get new customers. Their their their ads. We're all touchy feely.
• 16:04
  Speaker 1: You were born an investor. I never thought I could
• 16:07
  Speaker 1: do this. And the people they show in their ads
• 16:09
  Speaker 1: are not the typical lucrative customers they had either. They
• 16:11
  Speaker 1: were you know, um, mainly female, a few older people.
• 16:15
  Speaker 1: It was young males primarily. And and the thing is
• 16:18
  Speaker 1: they did most of their customers they don't make money
• 16:20
  Speaker 1: on but there's a subset on which they make a
• 16:23
  Speaker 1: lot of money, and so those are the people they're
• 16:25
  Speaker 1: trying to get. It was young risk seeking, uh, you know,
• 16:29
  Speaker 1: kind of not maybe not two wise men. And as
• 16:32
  Speaker 1: a father of three young men, I can I know
• 16:35
  Speaker 1: what I'm talking about. Uh. And and you know, and
• 16:38
  Speaker 1: so that that's when you had the explosion during the panemic,
• 16:40
  Speaker 1: and you had all this volatility which was just just addictive.
• 16:43
  Speaker 1: It was like crack cocaine, you know, you couldn't stop.
• 16:46
  Speaker 1: And then in the year from the pandemic bear market
• 16:50
  Speaker 1: bottom to a year after nine percent of American stocks rose,
• 16:55
  Speaker 1: which was crazy number. So so let's talk a little
• 16:59
  Speaker 1: bit about the revolution that that wasn't by using game
• 17:04
  Speaker 1: Stop as an example, as you did so well in
• 17:07
  Speaker 1: the book. And and it has to begin with a
• 17:10
  Speaker 1: guy whose name we now know as Keith gill Um.
• 17:15
  Speaker 1: Since this is a family station, I can only use
• 17:18
  Speaker 1: an acronym. He went by DFV on on Reddit and
• 17:23
  Speaker 1: on YouTube. He was Roaring Kitty and he basically takes
• 17:29
  Speaker 1: all of his money, some fifty something thousand dollars buys
• 17:34
  Speaker 1: leaps like a year or two oft in the future,
• 17:38
  Speaker 1: way out of the money and this just looks like
• 17:41
  Speaker 1: a wild So he buys calls betting the stock will
• 17:44
  Speaker 1: go up on game stop, which is a couple of
• 17:48
  Speaker 1: bucks a buck or two or three at the time,
• 17:50
  Speaker 1: and he posts it um without a whole lot of
• 17:54
  Speaker 1: commentary on game Wall street bets on Reddit, just to
• 18:00
  Speaker 1: picture of his brokerage account with the options there in
• 18:04
  Speaker 1: his portfolio, apparently nothing else, and the word phrase I
• 18:09
  Speaker 1: like the stock, yep, yolo. You only live once. So
• 18:13
  Speaker 1: he is a really really fascinating character and unusual character.
• 18:17
  Speaker 1: And one of the interesting things is, let me tell
• 18:19
  Speaker 1: you that. I mean, of course, his whole history is
• 18:21
  Speaker 1: there to be seen, but for ninety percent of of
• 18:25
  Speaker 1: this story, he's there in the background doing these these
• 18:30
  Speaker 1: videos four hour five hour long, you know, videos, talking
• 18:34
  Speaker 1: about the stock and talking about investing, making these posts,
• 18:39
  Speaker 1: responding to people who mainly made fun of him on
• 18:43
  Speaker 1: this message board, like a lot. He took a lot
• 18:45
  Speaker 1: of heat, and you know, he was he was unusual
• 18:47
  Speaker 1: in a lot of ways on this forum Wall street Bets.
• 18:50
  Speaker 1: One thing is he wrote in complete sentences. The other
• 18:53
  Speaker 1: is like he was, I mean you I think can
• 18:55
  Speaker 1: advocate people go out and buy it. He just said
• 18:58
  Speaker 1: I like the stock that basically as much as as
• 19:01
  Speaker 1: much influencing as he did was here's a picture of
• 19:05
  Speaker 1: my account. I'm gonna live and die on it. You guys,
• 19:07
  Speaker 1: go do what you want. You want a textbook example
• 19:10
  Speaker 1: of not how not to influence people online and that
• 19:14
  Speaker 1: and that's it. Because he was cerebral, he was polite,
• 19:17
  Speaker 1: uh you know he people would kind of make fun
• 19:20
  Speaker 1: of him and said, well, that's not the way I
• 19:21
  Speaker 1: think about it, because you know, behavioral finance dictates that
• 19:25
  Speaker 1: blah blah blah, and uh, as I follow the teachings
• 19:29
  Speaker 1: of as Watamurana and whatever like, you know, stuff like that,
• 19:32
  Speaker 1: no one knows, yeah, exactly the valuation guru and n
• 19:36
  Speaker 1: y u No, I think these kids know who that
• 19:38
  Speaker 1: was or there you know, right, I mean, And so
• 19:39
  Speaker 1: he was just basically sort of you know, it's like
• 19:42
  Speaker 1: a tree falling in the woods. I mean, some people
• 19:44
  Speaker 1: were like, you know, sometimes he would make money and
• 19:46
  Speaker 1: then I say hey, you should sell and like no, no, no,
• 19:48
  Speaker 1: And then he'd lose half of it. And people were
• 19:51
  Speaker 1: following and said, wow, what an idiot. You know, for
• 19:54
  Speaker 1: the money that you lost, I could have done this
• 19:55
  Speaker 1: and that you could have bought a Game Stop franchise. Yeah,
• 19:58
  Speaker 1: so he invested fifty three dollar is of his money.
• 20:00
  Speaker 1: He's not a rich guy at all. He was working.
• 20:03
  Speaker 1: He didn't say anything about himself, by the way, and
• 20:05
  Speaker 1: he was and I think had he said this, he
• 20:07
  Speaker 1: probably would have had less influence. He's a charter financial analyst,
• 20:09
  Speaker 1: which was a difficult qualification. One, two, and three have
• 20:13
  Speaker 1: each have like a fifty something percent fail rate. So
• 20:16
  Speaker 1: he's in the industry. And then he being being smart
• 20:20
  Speaker 1: and hard working is always good, but getting a little
• 20:23
  Speaker 1: lucky is better. And and not long afterwards, along comes
• 20:27
  Speaker 1: Michael Burry of the Big Short fame and basically takes
• 20:32
  Speaker 1: a position in Game Stop saying, hey, you know this
• 20:35
  Speaker 1: is a classic cigar butt. Uh, there's some value here
• 20:39
  Speaker 1: and and there's way too much negativity about it. What
• 20:43
  Speaker 1: happens from there, Well, I'll tell you that this is
• 20:45
  Speaker 1: interesting too, because I'll I won't say the entire name,
• 20:48
  Speaker 1: but it's df V is deep effing value. So value
• 20:52
  Speaker 1: is part of his moniker And he was upset. He said,
• 20:55
  Speaker 1: you know, thanks a lot Bury for jacking up my
• 20:58
  Speaker 1: cost basis because most peopore Well, so now it's going
• 21:02
  Speaker 1: to be more expensive to buy more, and he would
• 21:05
  Speaker 1: build a position over a couple of years. The technical
• 21:07
  Speaker 1: term is pyramiding. You keep adding to an existing position
• 21:11
  Speaker 1: as prices gradually rise. But they practically doubled overnight, right,
• 21:16
  Speaker 1: And he and most people, I mean people on this
• 21:20
  Speaker 1: board would be like I bought these options and like,
• 21:23
  Speaker 1: now it doubled my money, you know, because because the
• 21:26
  Speaker 1: stock went up because Michael Burry shows up, who was
• 21:28
  Speaker 1: played by Christian Bale. That's why most people think of
• 21:30
  Speaker 1: Christian picture of Christian Bale instead of the drum set
• 21:33
  Speaker 1: in the Big Short. Yeah, totally. And so and people
• 21:37
  Speaker 1: are like, what what's wrong with you? Like you should sell?
• 21:39
  Speaker 1: Like you know, he this is like a stroke of luck,
• 21:41
  Speaker 1: and it's not how he viewed it at all, which
• 21:44
  Speaker 1: is a very rare form of thinking. So he I
• 21:48
  Speaker 1: think like he was surprisingly long time for someone buying options, totally.
• 21:52
  Speaker 1: And I think I would not be surprised if this
• 21:55
  Speaker 1: guy shows up one day, five years, ten years, not
• 22:00
  Speaker 1: even that long, you know, managing some kind of you know,
• 22:02
  Speaker 1: value fund just sort of like a kind of a
• 22:04
  Speaker 1: hip Warren Buffett or something. Because he really he has
• 22:09
  Speaker 1: that way of thinking. First of all, obviously has analytical
• 22:11
  Speaker 1: chops by having had a cf A not maybe not
• 22:13
  Speaker 1: Buffett like, but he certainly knows what he's talking about.
• 22:16
  Speaker 1: But he he just has that that kind of unusual
• 22:19
  Speaker 1: way of of looking at things and inverting things that
• 22:22
  Speaker 1: that you need for success. But at the same time,
• 22:26
  Speaker 1: as we'll see later, he he's got that. You know,
• 22:29
  Speaker 1: he's cool and young and use thirty three thirty four
• 22:32
  Speaker 1: during this this this episode and the point at which
• 22:36
  Speaker 1: he became really super influential that were the most followed
• 22:39
  Speaker 1: people on the planet basically for a couple of weeks. Uh,
• 22:42
  Speaker 1: he wasn't posting any kind of analysis, you know, he
• 22:45
  Speaker 1: was like he became the hero briefly of this, this
• 22:48
  Speaker 1: whole movement. So so following Michael Burry not much longer
• 22:51
  Speaker 1: than that, Ryan Cohen, who is the founder of Chewy,
• 22:55
  Speaker 1: which essentially um is the most successful online and pet
• 23:01
  Speaker 1: food and and good store essentially with pets dot Com
• 23:05
  Speaker 1: couldn't do Chewy became and Ryan Cohen then says, hey,
• 23:10
  Speaker 1: we think game stop can become an online purveyor of
• 23:15
  Speaker 1: video games. Forget the brick and mortar that that's just
• 23:18
  Speaker 1: where they were. Let's talk about the future. And now
• 23:21
  Speaker 1: the stock takes another leg up from one and two
• 23:24
  Speaker 1: and three dollars to five and ten dollars. Tell us
• 23:27
  Speaker 1: what happens next. Yeah, so he shows up, and then
• 23:31
  Speaker 1: things start to get interesting. Um it starts going up
• 23:35
  Speaker 1: to the point that it was at the point that
• 23:38
  Speaker 1: that deep effing value would have sold. You know, he said,
• 23:42
  Speaker 1: like I think you know this. He had made it
• 23:44
  Speaker 1: up money. He was a millionaire, just a million, just
• 23:47
  Speaker 1: one million, one million and two million, couple of million,
• 23:50
  Speaker 1: not no big deal and life changing before to exactly
• 23:54
  Speaker 1: before taxes. But then a light bulb goes off. And
• 23:58
  Speaker 1: even before this, a light bulb kind of went all
• 24:00
  Speaker 1: from his head, uh, some months before because someone had
• 24:03
  Speaker 1: pointed out on this this board, like hey, this this
• 24:08
  Speaker 1: could be the greatest short squeeze of your life, the
• 24:11
  Speaker 1: mother of all shorts, the mother of all short squeezes,
• 24:14
  Speaker 1: you know, the kind of the saddam language. And and
• 24:17
  Speaker 1: it briefly doubled uh and and then settled back down.
• 24:21
  Speaker 1: But that was a foretaste. And that's the first time
• 24:22
  Speaker 1: you mentioned, like, hey, in addition to all the good
• 24:25
  Speaker 1: stuff I think about game stop, there's this additional possibility.
• 24:27
  Speaker 1: I'm not gonna really count on it that there could
• 24:29
  Speaker 1: be a short squeeze, because you know, the thing that
• 24:34
  Speaker 1: that game stopping the other they call the meme stocks,
• 24:36
  Speaker 1: you know, had in common was that they're all kind
• 24:39
  Speaker 1: of losers. They weren't a MC, the big movie chain
• 24:42
  Speaker 1: which was dying on the vine during the pandemic hurts,
• 24:46
  Speaker 1: which had already declared bankruptcy and was waiting for the
• 24:50
  Speaker 1: court to just doll out the assets, which is insane.
• 24:54
  Speaker 1: What were some of the other ones in BlackBerry? Remember right?
• 24:56
  Speaker 1: Nokia was another one that popped up like we Bath
• 25:00
  Speaker 1: and Beyond. We used to call that dumpster diving when
• 25:03
  Speaker 1: you're looking through the wreckage on Wall Street to find
• 25:06
  Speaker 1: that cigar stuff? What can I still smoke that someone
• 25:10
  Speaker 1: else has thrown away in two two twenty was possibly
• 25:14
  Speaker 1: the worst year ever for short sellers, or people who
• 25:17
  Speaker 1: bet that stocks are going to decline, usually by borrowing
• 25:21
  Speaker 1: the stock and and selling it. So basically they they
• 25:25
  Speaker 1: opened themselves up to unlimited losses in theory and and
• 25:29
  Speaker 1: limited gains. And so two thousand twenty was a terrible year.
• 25:32
  Speaker 1: You've had all kinds of dumb stuff going up that
• 25:33
  Speaker 1: they were betting against. Nicola and you know, I can
• 25:36
  Speaker 1: go on and on and on, so let's put let's
• 25:38
  Speaker 1: put some flesh on those bones. And this is data
• 25:41
  Speaker 1: from the book it in the We Saw Drop. And
• 25:48
  Speaker 1: then beginning on March, markets rallied to finish up more
• 25:54
  Speaker 1: than for the year. And during that year, short sellers
• 25:59
  Speaker 1: lost collectively two hundred and forty five billion dollars, which
• 26:04
  Speaker 1: is pretty astounding. But then when you look at the
• 26:07
  Speaker 1: three months leading into January one, when the MEME stocks
• 26:13
  Speaker 1: really exploded, UM, a basket of the fifty most shorted
• 26:18
  Speaker 1: stocks uh that had a market cap of at least
• 26:22
  Speaker 1: a billion dollars, that basket doubled. Those are some insane
• 26:27
  Speaker 1: stats if you're a short seller. Yeah, that that is
• 26:30
  Speaker 1: just a world of pain if you're a short seller.
• 26:32
  Speaker 1: And so think about it if you're I mean, there
• 26:34
  Speaker 1: there are people out there, Jim chain Os and what
• 26:36
  Speaker 1: have you who are dedicated short sellers. Um, there are
• 26:39
  Speaker 1: a lot more people out there who have short selling
• 26:42
  Speaker 1: as part of their strategy. That that's the bulk of
• 26:44
  Speaker 1: short selling. Some people are are just fine, bad companies
• 26:48
  Speaker 1: a bit against them. Others run what's called like a
• 26:51
  Speaker 1: one thirty thirty along short portfolio. Where you're a hundred
• 26:54
  Speaker 1: and thirty percent long and then thirty percent short, so
• 26:57
  Speaker 1: net you're a hundred percent long, but you have a
• 27:00
  Speaker 1: hedge if the market goes down on the bet that
• 27:04
  Speaker 1: the worst stocks will for more than the best stops totally,
• 27:07
  Speaker 1: and and that's that's usually a smart bet because you
• 27:11
  Speaker 1: usually don't worry about something terrible happening to you being ruined, right,
• 27:14
  Speaker 1: I mean, you don't think, what's the worst thing that's
• 27:17
  Speaker 1: gonna happen. You bet against game stop. And then let's
• 27:19
  Speaker 1: say somebody shows the best boy shows up in bodies. Okay,
• 27:23
  Speaker 1: you had a really bad box, right, you had a
• 27:25
  Speaker 1: terrible day, But that's it. Not a terrible day. You
• 27:28
  Speaker 1: had a bad day. It's probably some small part of
• 27:29
  Speaker 1: your your huge portfolio. And so what these meme stocks
• 27:34
  Speaker 1: had in common was that they're all losers like that,
• 27:37
  Speaker 1: they're all companies that have not made money in years,
• 27:39
  Speaker 1: were headed for possible bankruptcy, were sort of just anachronisms,
• 27:42
  Speaker 1: like like BlackBerry, the companies that, like in two thousand
• 27:46
  Speaker 1: and one were sort of hot, not in two thousand
• 27:48
  Speaker 1: and twenty one, right, And so they were in a
• 27:51
  Speaker 1: horrible year for short selling. They felt safe betting against
• 27:54
  Speaker 1: these companies. But they felt too safe, And that was
• 27:57
  Speaker 1: the kind of the dry kindling that started as fire,
• 28:00
  Speaker 1: was that they felt so safe betting against some of
• 28:02
  Speaker 1: these companies that their short positions left them no exit
• 28:07
  Speaker 1: if things really went wrong. But what's no one. As
• 28:10
  Speaker 1: we said at the beginning of the show, it's not
• 28:11
  Speaker 1: like you and I would be illegal for us to
• 28:13
  Speaker 1: gang up and say, hey, I happen to know that
• 28:16
  Speaker 1: x y Z hedge fund is very heavily short this thing,
• 28:20
  Speaker 1: and we can ambush him by basically all colluding, putting
• 28:23
  Speaker 1: all our money together and pushing it to the you know,
• 28:27
  Speaker 1: to the moon. But because then he would be forced
• 28:29
  Speaker 1: to buy back then his money, he would pile his
• 28:32
  Speaker 1: buying on top of ours to buy back the stock,
• 28:34
  Speaker 1: and then there'll be a stampede for this sort of
• 28:36
  Speaker 1: it's like shouting fire in a crowded theater. Short squeezes
• 28:39
  Speaker 1: happened all the time, but you don't like those ambushes.
• 28:41
  Speaker 1: They used to happen before there was an SEC Now
• 28:44
  Speaker 1: you can't do that. So so again, more more data points.
• 28:48
  Speaker 1: You know, a normal stock, a billion dollar plus stock
• 28:53
  Speaker 1: might have a short interest of ten or twent if
• 28:57
  Speaker 1: that gets up to thirty forty, and that's called a
• 29:01
  Speaker 1: crowded short. Hey, too many people are betting against it.
• 29:05
  Speaker 1: Some of these um small cap and microcap stocks had
• 29:09
  Speaker 1: shortest interests of game Stop had a short interest of
• 29:14
  Speaker 1: a hundred and forty percent. This was a lot of
• 29:18
  Speaker 1: dry kindling and people lighting sparks, wasn't it. It totally
• 29:23
  Speaker 1: was I mean to the float and people. And of
• 29:26
  Speaker 1: course they're they're ongoing sort of you know, complaints and
• 29:28
  Speaker 1: conspiracy theories like that's illegal. You can't you know, it
• 29:32
  Speaker 1: is not illegal because there's a process called re hypothication
• 29:35
  Speaker 1: where if you you know, if you go on the
• 29:36
  Speaker 1: market today and you buy a stock, uh, and then
• 29:39
  Speaker 1: it's in your account at Schwab or whatever. Schwab might
• 29:42
  Speaker 1: lend that stock out. Even if you purchased that stock
• 29:44
  Speaker 1: from a short seller. They don't know where it came from,
• 29:46
  Speaker 1: so hypothecate that and it could be lent twice or
• 29:49
  Speaker 1: three times. It happens. There's no ceiling on the amount
• 29:52
  Speaker 1: of short interest other than hey, at two or three,
• 29:56
  Speaker 1: you know, it's financial suicide at a there's no room
• 30:01
  Speaker 1: for you know, and and and as we clearly saw. So,
• 30:05
  Speaker 1: so let's talk a little bit about short selling and
• 30:09
  Speaker 1: what's good and bad about it. But I gotta start
• 30:12
  Speaker 1: by asking about a story you tell about the history
• 30:18
  Speaker 1: of the paperwork crisis on Wall Street and how does
• 30:22
  Speaker 1: that relate to what's going on with uh, with Reddit
• 30:25
  Speaker 1: and game stop and the meme stocks tell us about
• 30:29
  Speaker 1: the paperwork crisis? Sure, well, there's a great book by
• 30:33
  Speaker 1: John Brooks called The Go Go Years where I think
• 30:35
  Speaker 1: I first heard about that. I've read about it other
• 30:37
  Speaker 1: places too, But the paperwork crisis was something that happened
• 30:40
  Speaker 1: during a previous speculative mania in the late nineties sixties,
• 30:43
  Speaker 1: when you had just an explosion in trading activity. And
• 30:47
  Speaker 1: this was before things were computerized. There was so much paperwork,
• 30:50
  Speaker 1: in fact, that the stock market had to be for
• 30:52
  Speaker 1: a long long time closed on Wednesdays just in order
• 30:55
  Speaker 1: to allow people to catch up, you know, settling all
• 30:58
  Speaker 1: the trades and making This was the nifty if the era,
• 31:00
  Speaker 1: and a lot of stocks, the postwar bull market was
• 31:03
  Speaker 1: still running from you know, the late forties right up
• 31:06
  Speaker 1: to the mid sixties. Wall Street was hot. Wall Street
• 31:10
  Speaker 1: was hot, and that was at a time that it
• 31:12
  Speaker 1: was really expensive to trade, which is the That's the
• 31:15
  Speaker 1: reason that I one reason that I brought it up
• 31:18
  Speaker 1: because it wasn't until five that commissions were deregulated. So
• 31:23
  Speaker 1: for years and years and years, this is a complaint
• 31:25
  Speaker 1: saying that like brokers could charge fixed commissions and it
• 31:28
  Speaker 1: was just really expensive for brokers to help themselves to
• 31:31
  Speaker 1: your money basically on Wall streets. So you know, all
• 31:35
  Speaker 1: these these people who were involved in this never could
• 31:37
  Speaker 1: have been involved because the hurdle financially to get into
• 31:42
  Speaker 1: trading was just too high. And then you couldn't be hyperactive.
• 31:45
  Speaker 1: And even then people were hyperactive. Then when you you
• 31:48
  Speaker 1: brought commissions down and down and down, you know, you
• 31:50
  Speaker 1: had the dot com and whatever, and then you know,
• 31:53
  Speaker 1: then now you had this which was tradings down to
• 31:56
  Speaker 1: now to free down to free. That that kind of
• 31:59
  Speaker 1: makes a little bit easy year for there to be
• 32:00
  Speaker 1: a specular domania. And so that that was just kind
• 32:03
  Speaker 1: of part of the kind of long arc of history
• 32:05
  Speaker 1: on Wall Street that I tell. And yeah, and so
• 32:08
  Speaker 1: making it free you really crossed a rubicon. But but
• 32:11
  Speaker 1: even making it cheaper made made things easier. Of course,
• 32:14
  Speaker 1: it may got made cheaper in the middle of the
• 32:16
  Speaker 1: worst decade ever really except the nineteen thirties from Wall Street.
• 32:18
  Speaker 1: Nineteen seventy five was a terrible time. You know, if
• 32:21
  Speaker 1: if you had gone to like, uh, these brokers with
• 32:23
  Speaker 1: like you know, sideburns and wide ties and polyesters suits
• 32:27
  Speaker 1: and stuff in nineteen seventy five were like having a
• 32:30
  Speaker 1: terrible time financially in nineteen seventy five, and you're like, oh,
• 32:32
  Speaker 1: this is the first step in you know, this kind
• 32:35
  Speaker 1: of revolution that's gonna make you guys really rich. You know,
• 32:37
  Speaker 1: you're gonna have this surge of people in the eighties
• 32:39
  Speaker 1: coming in four oh one. Ks are going to be
• 32:41
  Speaker 1: invented and all the stuff. They would have thought you
• 32:43
  Speaker 1: were crazy, like, you know, and then some guys gonna
• 32:46
  Speaker 1: you know, go on this thing called the Internet. His
• 32:47
  Speaker 1: name is Roaring Kitty, and he's gonna, you know, make
• 32:50
  Speaker 1: a video game store, you know, be the most traded
• 32:53
  Speaker 1: security on the planet from total obscurity. Like then they
• 32:56
  Speaker 1: really think you're crazy. But that's that's you know, that
• 32:57
  Speaker 1: was the beginning of it. That was a key step.
• 32:59
  Speaker 1: So so that's how we ended up eventually getting to
• 33:02
  Speaker 1: the point where um trading became free. The short squeeze
• 33:08
  Speaker 1: that that was orchestrated on Reddit has this underlying theme
• 33:13
  Speaker 1: that short sellers are evil, that this is all a
• 33:16
  Speaker 1: big conspiracy theory. Um. Even Elon Musk has weighed in
• 33:20
  Speaker 1: on this. Why the animus towards short sellers. Yeah, if
• 33:26
  Speaker 1: you look at the way that short sellers and I
• 33:28
  Speaker 1: just think encourage readers to go to Google right now
• 33:32
  Speaker 1: and type in short sellers are and tell me what
• 33:34
  Speaker 1: you see. And it's not going to be a nice word.
• 33:37
  Speaker 1: It's not going to be a nice description. So going
• 33:39
  Speaker 1: back to the history of of stock markets, back to
• 33:41
  Speaker 1: the sixteen thirties in the Netherlands, short sellers have been
• 33:46
  Speaker 1: reviled because whereas most of us buy stock and then
• 33:49
  Speaker 1: hope it will go up and keep paying us dividends,
• 33:52
  Speaker 1: they're making the opposite bet. Making that opposite bet, though,
• 33:57
  Speaker 1: is not predatory at all. As a matter of fact,
• 34:00
  Speaker 1: the existence of short selling is very beneficial to to
• 34:07
  Speaker 1: every one of the markets, but especially to a retail
• 34:09
  Speaker 1: investor that doesn't know a lot. And I'll explain why.
• 34:12
  Speaker 1: One reason is that short sellers provide a lot of
• 34:15
  Speaker 1: liquidity to the market that wouldn't otherwise shorts. But there
• 34:19
  Speaker 1: if there were no short selling, then there are only
• 34:21
  Speaker 1: two things you could do. You could say, I'm going
• 34:23
  Speaker 1: to buy the stocker. I'm not going to buy the stock.
• 34:25
  Speaker 1: You abstain or you vote. Yes you can't vote, and no,
• 34:28
  Speaker 1: you can't say, you know what, the stock is too expensive,
• 34:30
  Speaker 1: And so there's nobody to really to kind of correct
• 34:34
  Speaker 1: the value of a stock. It takes a much much
• 34:36
  Speaker 1: longer time for the kind of scales to fall from
• 34:38
  Speaker 1: our eyes, not just when there's a fraud like Enron,
• 34:41
  Speaker 1: which was explor Jim chanos a lot, and he's Enron
• 34:45
  Speaker 1: was but one of many frauds that he and other
• 34:49
  Speaker 1: short sellers have identified. And in fact, short sellers seem
• 34:52
  Speaker 1: to do a better job than the FTC or the
• 34:56
  Speaker 1: SEC or whatever organization is in charge of instigating corporate fraud.
• 35:02
  Speaker 1: Then you know they they've done a really good job
• 35:05
  Speaker 1: letting investors know this company is lying to you and
• 35:09
  Speaker 1: if you put money into this, you're gonna lose it.
• 35:11
  Speaker 1: As Jim says, you know, short sellers are financial detectives,
• 35:14
  Speaker 1: and regulators are financial archaeologists, you know, after the fact,
• 35:17
  Speaker 1: that come in and and do something hopefully good. Yeah,
• 35:20
  Speaker 1: so they I mean, I'm not holding short sellers up
• 35:23
  Speaker 1: as like a paragon of virtue there out there on
• 35:26
  Speaker 1: Wall Street. They're trying to make money. That's that's the
• 35:28
  Speaker 1: free market. They're out there, They're playing a very dangerous game.
• 35:32
  Speaker 1: They have to be really confident in selling something short because,
• 35:35
  Speaker 1: as I said, the losses are theoretically unlimited, the gains
• 35:39
  Speaker 1: are keppt. It's the it's the inverse of what you
• 35:42
  Speaker 1: face as a normal investor. By the way, I'm not
• 35:45
  Speaker 1: encouraging anyone out there to go and sell stock short.
• 35:47
  Speaker 1: It's a very dangerous and complicate anything. It's hard, and
• 35:51
  Speaker 1: I don't think that people need to do it, but
• 35:53
  Speaker 1: I think that that we're all better off if short
• 35:56
  Speaker 1: sellers are kind of unmolested. I guess in the market
• 35:58
  Speaker 1: that's you know, they're not. There have been times, especially
• 36:02
  Speaker 1: bad times in the market, and research you show this
• 36:04
  Speaker 1: again and again when you when you restrict short selling,
• 36:07
  Speaker 1: then you wind up kind of delaying the normalization of
• 36:11
  Speaker 1: the market. Like in two thousand and eight and around
• 36:14
  Speaker 1: the time of it was the first ones to step
• 36:16
  Speaker 1: in and buy in a crash because they're covering and saying,
• 36:19
  Speaker 1: all right, we've made enough money. And literally studies have
• 36:23
  Speaker 1: shown they're the first buyers than the value guys come
• 36:26
  Speaker 1: in and the technicals. There's like a whole arc of that.
• 36:29
  Speaker 1: You reference in the book a two thousand and four
• 36:32
  Speaker 1: Harvard study by Professor Orton Lamont that said, when when
• 36:37
  Speaker 1: you have companies complaining about short sellers in general, they
• 36:42
  Speaker 1: do much worse than the average stock and much more
• 36:46
  Speaker 1: frequently go bankrupt. So it's almost a red flag when
• 36:50
  Speaker 1: you hear management. Dick fald is a perfect example, got
• 36:54
  Speaker 1: handed a copy of that someone in the book, you say,
• 36:56
  Speaker 1: when he was complaining about it, someone literally handing him
• 36:59
  Speaker 1: handed him a copy of the study, and I guess
• 37:01
  Speaker 1: the implication was, Hey, Dick, maybe you should just not
• 37:04
  Speaker 1: not go there. Yeah, well he did not take that advice,
• 37:08
  Speaker 1: unfortunately went bankrupt. So they fit the study perfectly. So
• 37:12
  Speaker 1: so short selling isn't necessarily um inherently evil, And yet
• 37:19
  Speaker 1: that seems to be the guestult on on Wall Street bets.
• 37:24
  Speaker 1: And that's a really interesting point at which I kind
• 37:27
  Speaker 1: of understand where the people who mainly were involved in
• 37:30
  Speaker 1: this came from. So it's like young people between the
• 37:34
  Speaker 1: ages of eighteen and thirty five primarily who participated in this,
• 37:37
  Speaker 1: mostly male. As I said, but gender doesn't doesn't matter
• 37:40
  Speaker 1: in this case. But their former to financial experience before
• 37:43
  Speaker 1: they ever could invest, was the Global Financial Crisis, and
• 37:46
  Speaker 1: so and there's this lingering anger that like, we never
• 37:48
  Speaker 1: really got our pound of flesh. My parents lost their home,
• 37:51
  Speaker 1: my parents friends lost their house, or I have these
• 37:54
  Speaker 1: student loans that are really hard to pay back. I
• 37:56
  Speaker 1: can't earn enough and I can't buy a house, and
• 37:59
  Speaker 1: these guys are getting rich and and and the decades
• 38:02
  Speaker 1: since the GFC, you know, you've you've had a further
• 38:06
  Speaker 1: kind of spread. You know, the rich have gotten richer
• 38:08
  Speaker 1: and the poor have not gotten much wealthier. And so
• 38:11
  Speaker 1: you know, you you really do have polarization in terms
• 38:14
  Speaker 1: of wealth and income and access to all kinds of
• 38:18
  Speaker 1: things in this country. It see, it's not a you know,
• 38:20
  Speaker 1: a very egalitarian society that we live in, much less
• 38:23
  Speaker 1: so than the past. And so they focus that animus
• 38:27
  Speaker 1: on not on rich people, because they like Elon Musk
• 38:30
  Speaker 1: and they like other rich people. They like Silicon Valley
• 38:33
  Speaker 1: rich guys. The exactly he's cool, but they they if
• 38:40
  Speaker 1: you wear a suit and work on Wall Street, you're
• 38:42
  Speaker 1: like a cartoon villain to them. And then specifically if
• 38:45
  Speaker 1: you're a hedge phone manager, hedgehohn managers to them are
• 38:48
  Speaker 1: are evil personified. And then if your hedgehump manager who
• 38:51
  Speaker 1: sell stock short where there's already this bias against betting
• 38:54
  Speaker 1: against something, there's this kind of sense that like they
• 38:56
  Speaker 1: want to ruin a company, which is not what they
• 38:58
  Speaker 1: want to do, because that's not what happens when you
• 39:02
  Speaker 1: it's too hard to do that. So so there was
• 39:04
  Speaker 1: something you reference in the book off of Off of
• 39:07
  Speaker 1: Reddit that cracked me up. A lot of the memes,
• 39:10
  Speaker 1: you know, this was really amusing and entertaining. So so
• 39:15
  Speaker 1: the intersection of the social side of it, the political
• 39:19
  Speaker 1: economic warrior side of it, and the investing side. It's
• 39:23
  Speaker 1: a weird group. I love this bankrupting institutional investors for dummies,
• 39:28
  Speaker 1: Like they photoshopped the investing for dummies and we're gonna
• 39:32
  Speaker 1: go after the hedge funds, who, by the way, had
• 39:36
  Speaker 1: nothing whatsoever to do with a great financial crisis, but
• 39:40
  Speaker 1: seemed to have garnered a lot of criticism that they
• 39:44
  Speaker 1: were somehow involved when they of all the people to blame,
• 39:49
  Speaker 1: not them, right, they There's lots of stuff. If you
• 39:51
  Speaker 1: want to go someone like that, there's a million people
• 39:54
  Speaker 1: to blame. But of of all the folks, hedge funds
• 39:57
  Speaker 1: really were not involved in the financial crisis, so it
• 40:00
  Speaker 1: seems weird that there's this sort of undirected general smoldering
• 40:07
  Speaker 1: rage and it's just looking for an outlet. And then
• 40:11
  Speaker 1: they told them on the board, Hey, there's this hedgehow
• 40:13
  Speaker 1: manager who like could otherwise a low profile guy. His
• 40:18
  Speaker 1: firm is believe it or not, called Melvin Capital. What
• 40:20
  Speaker 1: did we and how did the name Melvin Capital come about?
• 40:24
  Speaker 1: Gabe Plotkin, who's one of the one of the big,
• 40:25
  Speaker 1: one of the few big loues, which is a dweed
• 40:27
  Speaker 1: be enough name to begin with. He's like, no, no,
• 40:30
  Speaker 1: Gabe Plotkin isn't nebishy enough. Let's call it Melvin. It
• 40:36
  Speaker 1: was his grandfather's name. His grandfather was a communist store
• 40:38
  Speaker 1: owner who we really admired, and so he named his
• 40:41
  Speaker 1: lovely sentiment. Well people people laughed at it like they
• 40:44
  Speaker 1: were like some of the commentary when he set up
• 40:46
  Speaker 1: the fund, because he came from S. A. C. H.
• 40:49
  Speaker 1: Which was Cohen's fund and point seventy two. But he
• 40:55
  Speaker 1: he was seated by Steve Cohen and he four years
• 40:59
  Speaker 1: had huge tess. He was a very good fun. People
• 41:02
  Speaker 1: were laughing. He personally double digit returns totally. He personally
• 41:07
  Speaker 1: this this is like the just incredible to me this number.
• 41:10
  Speaker 1: I've mentioned that. People said, now you must be you
• 41:13
  Speaker 1: must be, must be wrong about that. He you know,
• 41:15
  Speaker 1: people not not from Wall Street or like really like
• 41:18
  Speaker 1: he earned personally eight forty six million dollars the year
• 41:21
  Speaker 1: before this whole episode went down. He was a billionaire
• 41:24
  Speaker 1: multiple times, owner over not even counting what he still had,
• 41:28
  Speaker 1: like a big chunk of of UH. Melvin was his
• 41:31
  Speaker 1: own capital as well. At that point it was so
• 41:34
  Speaker 1: and and and seven billion dollars of it went poof
• 41:37
  Speaker 1: in a few days because of this. Yes, so, but
• 41:40
  Speaker 1: he was and and there are other hedge funds that
• 41:43
  Speaker 1: were short um game stop, but he was especially short
• 41:46
  Speaker 1: and because he had a fund that that specialized UH
• 41:50
  Speaker 1: in retailers and things like that and consumer discuss dead
• 41:54
  Speaker 1: center of his target of companies that either were overvalued
• 41:59
  Speaker 1: or over prias or should be bankrupt. And he testified
• 42:02
  Speaker 1: that in two thousand and fourteen when he set up
• 42:04
  Speaker 1: his fund. That was one of the first positions he
• 42:06
  Speaker 1: put on. It was a good good bet too. In
• 42:08
  Speaker 1: two thousand and fourteen because it went down a lot
• 42:11
  Speaker 1: between that. Where was he initially short from gee? I
• 42:15
  Speaker 1: think it was probably uhs at that time, So you
• 42:18
  Speaker 1: wrote it down to sixty I think, which the question really,
• 42:22
  Speaker 1: what are you hanging around for the last buck or two? Well?
• 42:25
  Speaker 1: And and it crowded short? You know that? Is it
• 42:28
  Speaker 1: just not wanting to pay the taxes? I don't. That
• 42:31
  Speaker 1: was one of the things that you don't answer in
• 42:33
  Speaker 1: the book, and I don't I have yet to read
• 42:35
  Speaker 1: that answer. But you short something at forty it drops
• 42:38
  Speaker 1: to a dollar or two? Who cares about that? Last book?
• 42:42
  Speaker 1: What are you waiting for? Yeah? And I mean obviously
• 42:46
  Speaker 1: you know in reporting a book, there people you speak
• 42:48
  Speaker 1: with who are on the record, people are off the record.
• 42:50
  Speaker 1: I did try to kind of suss that out and
• 42:52
  Speaker 1: never really to my satisfaction. Didn't. I just think it
• 42:55
  Speaker 1: was because it was still there was just nothing else
• 42:58
  Speaker 1: too short. I guess two dollars us to zero is
• 43:00
  Speaker 1: still another hundred so um. Yeah. And then the reason
• 43:05
  Speaker 1: that they became aware of him because the way that
• 43:07
  Speaker 1: short selling works is you can see how much short
• 43:09
  Speaker 1: interest there is in a stock, but you can't see
• 43:11
  Speaker 1: who is shorting it. But if you buy derivatives for
• 43:14
  Speaker 1: your fund that have the same effect, and he did,
• 43:17
  Speaker 1: and that was turned out to be a fatal mistake
• 43:20
  Speaker 1: because because these weren't coal options where you're deciding in
• 43:24
  Speaker 1: advance how much you're risking, when there are certain derivatives
• 43:29
  Speaker 1: where you have full exposure in both directions. There there are,
• 43:32
  Speaker 1: although he owned puts which are which do have a
• 43:34
  Speaker 1: limited loss, you can only lose the premium. But that
• 43:36
  Speaker 1: and that's what showed up. And then he and then
• 43:39
  Speaker 1: he was being talked about on this forum. Uh you
• 43:42
  Speaker 1: know when when Ryan the same time that Ryan Cohen
• 43:45
  Speaker 1: came in and then he opted and even when he
• 43:49
  Speaker 1: was being talked about and I mean there, I don't
• 43:53
  Speaker 1: want to kind of get into you let me say
• 43:56
  Speaker 1: things that you don't want to say, because I get
• 43:57
  Speaker 1: away with him where maybe you are uncomfortable saying that.
• 44:00
  Speaker 1: Here's a guy who's incredibly successful, he's a Wall Street professional,
• 44:05
  Speaker 1: he's a billionaire, and he sees a bunch of wise
• 44:09
  Speaker 1: asses and kids on a message board mocking him, and
• 44:12
  Speaker 1: he's like, really, let me show you how it's done,
• 44:15
  Speaker 1: because this pos is going to zero. Like it's easy
• 44:19
  Speaker 1: to see. Yeah, there's a lack of humility there. But
• 44:22
  Speaker 1: it's not you know, Foldy and Jubris, it's just show
• 44:28
  Speaker 1: the kids how it's done and didn't work out. That's
• 44:31
  Speaker 1: that's I think that's a pretty good guess at what happened.
• 44:34
  Speaker 1: I think it also it's a it's it's an organization
• 44:37
  Speaker 1: of thirty or forty people that may not have gotten
• 44:39
  Speaker 1: to his level yet. I think I was just the
• 44:41
  Speaker 1: person one or two levels below him just didn't take
• 44:43
  Speaker 1: it seriously. They were like, why would you? Why would
• 44:47
  Speaker 1: before this all happened, why would anyone take degenerates and
• 44:51
  Speaker 1: apes seriously? I mean the whole thing about Reddit, and
• 44:54
  Speaker 1: and I love Reddit. I've been playing on Reddit for years.
• 44:59
  Speaker 1: They're all these reddit you know, slash ours, all these
• 45:02
  Speaker 1: subcategories that their rabbit holes. And yeah, I read it
• 45:06
  Speaker 1: has issues with all sorts of of like every social media,
• 45:10
  Speaker 1: all sorts of problems. Um, that's a whole another conversation.
• 45:14
  Speaker 1: But if you want to do a deep dive into anything,
• 45:19
  Speaker 1: um there's a reddit for it, and some of them
• 45:22
  Speaker 1: are just mind blowingly astonishing. But if you're a professional
• 45:27
  Speaker 1: hedge fund manager, how seriously are you going to take people?
• 45:31
  Speaker 1: And it's not even in the main investing channel. It's
• 45:35
  Speaker 1: in like a sub sub channel that's a bunch of goofballs. Yeah,
• 45:39
  Speaker 1: and and and of what they post is just rude
• 45:44
  Speaker 1: jokes and memes and things like that, So there's not
• 45:46
  Speaker 1: a lot of the thing is that the memes were
• 45:49
  Speaker 1: the message. The memes, you know, they used like hieroglyphs
• 45:53
  Speaker 1: or that they used to to communicate. And so which
• 45:57
  Speaker 1: is why we call them meme stocks today. And uh,
• 46:00
  Speaker 1: I mean, they did not take it seriously. They do today.
• 46:02
  Speaker 1: As a matter of fact, there was a study done
• 46:04
  Speaker 1: that showed that today of hedge funds either themselves or
• 46:09
  Speaker 1: they pay a service to monitor social media for their positions.
• 46:12
  Speaker 1: So you know, they take it very seriously today, are
• 46:14
  Speaker 1: using AI to make sure that this doesn't happen again.
• 46:19
  Speaker 1: And there's a data point from the book that I
• 46:21
  Speaker 1: have to share. So Goldman Sachs keeps a basket of
• 46:26
  Speaker 1: unprofitable stocks, that's literally what the basket is called. And
• 46:30
  Speaker 1: in when the Dow was up about seven, this gained.
• 46:38
  Speaker 1: Stop and think about how insane that is the worst
• 46:42
  Speaker 1: of the worst are just destroying everything else. Yeah, I mean,
• 46:47
  Speaker 1: and that that tells you what why a quarter of
• 46:52
  Speaker 1: a trillion dollars almost was was lost by short sellers
• 46:56
  Speaker 1: in two thousand and twenty. It's because the dumber it was,
• 47:02
  Speaker 1: the better it did. And that's and that that really
• 47:06
  Speaker 1: formed the attitude of this. You know, there are people
• 47:09
  Speaker 1: who were participated in the seam stock because who had
• 47:12
  Speaker 1: three months, six months, nine months, maybe a year of
• 47:16
  Speaker 1: of investing experience, all of it in these crazy markets
• 47:19
  Speaker 1: everything that's some serious guy like Barry Ritholts, you know,
• 47:22
  Speaker 1: goes on TV and talks about and says this, I
• 47:25
  Speaker 1: would not touch this. Those are the things that went
• 47:27
  Speaker 1: up right. So, I mean I went up a lot
• 47:30
  Speaker 1: and went up a lot. So and you know, Warren Buffett,
• 47:33
  Speaker 1: the greatest investor of all time, got out of airline stocks,
• 47:36
  Speaker 1: which he he wasn't right, but he very well could
• 47:39
  Speaker 1: have been right. I mean, things looked pretty hairy. We
• 47:41
  Speaker 1: didn't know there's gonna be a vaccine. We didn't know
• 47:43
  Speaker 1: how bad the you know, COVID pandemic would be. It
• 47:46
  Speaker 1: certainly looked really bad in in March and April, and
• 47:49
  Speaker 1: he sold out of his airline stocks at a big loss. Uh.
• 47:53
  Speaker 1: Not typically Buffetty behavior, But you make the best decision
• 47:56
  Speaker 1: you can with the information you have at the hand
• 47:59
  Speaker 1: at the time, time, and as often as not, you're
• 48:02
  Speaker 1: right or wrong. And in that case, Buffett was wrong.
• 48:05
  Speaker 1: That doesn't seem to be what the redditors were doing.
• 48:08
  Speaker 1: These folks were just you know, we weren't democratizing finance.
• 48:13
  Speaker 1: We were democratizing risk taking and speculation. So throughout the
• 48:18
  Speaker 1: book we hear the phrase democratizing finance. Were we democratizing
• 48:24
  Speaker 1: finance or democratizing risk taking and speculation? You know, it's
• 48:29
  Speaker 1: it's a phrase that drives me crazy. Democratizing finance, you know,
• 48:33
  Speaker 1: to me is basically bringing uh investing to a level
• 48:37
  Speaker 1: that anyone can participate, and basically that has been accomplished
• 48:44
  Speaker 1: through years of competition and technological progress. You know, I
• 48:48
  Speaker 1: give the example, Uh we're talking earlier about the paperwork crisis.
• 48:52
  Speaker 1: It was very expensive to trade that if you had
• 48:54
  Speaker 1: a little bit of money that they wouldn't bother giving
• 48:57
  Speaker 1: the time of Dane Walster, you had to have a
• 48:59
  Speaker 1: lot and then and then you really got got fleeced,
• 49:01
  Speaker 1: you know, because of big charges. Even just to you know,
• 49:04
  Speaker 1: you look, people talk about these long term charts were like, oh,
• 49:08
  Speaker 1: if you had invested in there was no index fund then,
• 49:12
  Speaker 1: and it costs you money to reinvest your dividends. And
• 49:14
  Speaker 1: like if you had a little bit of money, if
• 49:16
  Speaker 1: you had invested a dollar where you couldn't invest a
• 49:18
  Speaker 1: dollar then, so it's totally there was no partial share purchases.
• 49:22
  Speaker 1: Well no, no, And so today you can you can
• 49:24
  Speaker 1: do that and rob at robin Hood and others. You
• 49:26
  Speaker 1: can buy a fractional share, You can buy an exchange
• 49:29
  Speaker 1: traded fund that cost zero points zero three percent a year.
• 49:32
  Speaker 1: You can do all these things. So the door is
• 49:35
  Speaker 1: open for people with very little money today, and it
• 49:39
  Speaker 1: was you know, prior to robin Hood a though the
• 49:41
  Speaker 1: robin Hood in fact did kind of accelerate things very
• 49:45
  Speaker 1: very cheaply, very easily to get on that ladder, which
• 49:48
  Speaker 1: I urge anyone especially in their like their teens or twenties,
• 49:52
  Speaker 1: getting started out with lots of decades to compound their wealth,
• 49:55
  Speaker 1: to do it is a smart thing to do to
• 49:57
  Speaker 1: get on the ladder, but not in an active crazy way,
• 50:00
  Speaker 1: in a kind of you know, put your money and
• 50:03
  Speaker 1: let it grow and don't check it a lot way,
• 50:04
  Speaker 1: and and and save as much as you can weigh
• 50:06
  Speaker 1: and that that really has been democratized. But then when
• 50:09
  Speaker 1: you talk to Robin Hood and say, hey, you guys
• 50:12
  Speaker 1: are just encouraging you're you've gamified this thing and you're
• 50:16
  Speaker 1: inducing fomo. You know, you open up your app and
• 50:18
  Speaker 1: you're the first thing you show is what everyone else
• 50:22
  Speaker 1: is doing and buying. What's up? What that, what's down?
• 50:24
  Speaker 1: That's not useful information. That's information that makes you feel
• 50:26
  Speaker 1: like you're missing out, makes you feel like you need
• 50:28
  Speaker 1: to be active. And they're active customers, the people who
• 50:31
  Speaker 1: use the app. We're using it in two thousand and twenty,
• 50:34
  Speaker 1: on average over seven times a day, opening it seven
• 50:37
  Speaker 1: times a day. They have customers who were trading eleven
• 50:40
  Speaker 1: thousand times over a six month period. There's just absolutely
• 50:43
  Speaker 1: no reason for anybody to trade eleven thousand times, or
• 50:47
  Speaker 1: even a thousand times, or even a hundred times, you know,
• 50:50
  Speaker 1: a time span like that. It's it's study after study,
• 50:52
  Speaker 1: by the way has shown that that is uh inversely
• 50:56
  Speaker 1: correlated with your performance. The more you trade, the worst
• 50:58
  Speaker 1: you do. That's it's a very very well understood effect.
• 51:02
  Speaker 1: And even just checking your account frequently, it's called myopic
• 51:05
  Speaker 1: loss of version. It's well understood that if you look
• 51:09
  Speaker 1: at your account. Least you'll do better because you're less
• 51:11
  Speaker 1: likely to see a loss which pains you more than
• 51:13
  Speaker 1: again pleases you. And so you know that that is
• 51:17
  Speaker 1: not the formula for success. They understood that. And you
• 51:20
  Speaker 1: note in the book the average Schwab account trades forty
• 51:24
  Speaker 1: five times less than the average robin Hood account. Those
• 51:27
  Speaker 1: numbers per per dollar in the account. It's just mind
• 51:30
  Speaker 1: blod and and options are trading even more. And only
• 51:35
  Speaker 1: of robin Hood's customers traded options, but options were the
• 51:39
  Speaker 1: most lucrative product for them because and that's you know,
• 51:41
  Speaker 1: you've heard a lot about payment for order flow. Paying
• 51:43
  Speaker 1: for order flow. I don't think it's it's just a
• 51:46
  Speaker 1: mechanical way of paying for trades. I don't have such
• 51:48
  Speaker 1: a big problem with it. But it is uh a
• 51:52
  Speaker 1: practice where you basically you sell your orders to a
• 51:55
  Speaker 1: market maker that's off a stock exchange, that pays you
• 51:58
  Speaker 1: to execute it, and then keep a little bit of
• 52:00
  Speaker 1: the money. Basically, he was very efficient at matching it
• 52:02
  Speaker 1: up payment for order flow. The only problem I have
• 52:04
  Speaker 1: with it is that it enables this behavior by making
• 52:06
  Speaker 1: trading free. Otherwise, I don't think there's anything really insidious
• 52:09
  Speaker 1: about it. Which is a controversial view now, I know.
• 52:11
  Speaker 1: But so so let's look at the aftermath of this. So,
• 52:15
  Speaker 1: so Keith gil took fifty three thousand dollars buys deep
• 52:19
  Speaker 1: out of the money calls, and by the time the
• 52:23
  Speaker 1: calls peak a year and change later, it's what forty
• 52:28
  Speaker 1: seven million dollars. Yeah, I think intra day he probably
• 52:31
  Speaker 1: had sixty or seventy million dollars. But yeah, but I think,
• 52:35
  Speaker 1: uh about forty nine or fifty uh like at the
• 52:38
  Speaker 1: end of day at he would have had more had
• 52:41
  Speaker 1: he not, because he cashed in somebody he had He
• 52:43
  Speaker 1: had perfect timing almost he cashed them in during the week.
• 52:47
  Speaker 1: That was the real menia. So what did he end
• 52:49
  Speaker 1: up netting when everything was said and done, because I
• 52:52
  Speaker 1: was kind of surprised that he bought more stock. So
• 52:56
  Speaker 1: so from what I recall in the book, he cashes
• 53:00
  Speaker 1: out about three million dollars worth of options and then
• 53:03
  Speaker 1: later sells a bunch of the options and exercises them
• 53:07
  Speaker 1: and ends up with thirty million dollars worth of stock
• 53:11
  Speaker 1: something crazy game stop, Yeah, which is a pretty even
• 53:14
  Speaker 1: then you know, he's real money. He was because he
• 53:17
  Speaker 1: was called to this congressional hearing. That's the only time
• 53:19
  Speaker 1: we've ever heard his voice or seeing him. I mean,
• 53:20
  Speaker 1: he was interviewed by two YouTube exactly. Sorry yeah, but
• 53:26
  Speaker 1: um yeah, but he was like not a total unknown
• 53:28
  Speaker 1: then and he stopped doing those videos and uh yeah exactly.
• 53:31
  Speaker 1: So people were very curious. It was probably one of
• 53:32
  Speaker 1: the more watched regressional hearings, you know, because because of him,
• 53:36
  Speaker 1: really and he got asked the fewest questions. Um, we're
• 53:39
  Speaker 1: almost the fewest questions, but I mean, you know, it
• 53:41
  Speaker 1: was what were they gonna They didn't want to antagonize him,
• 53:43
  Speaker 1: and you know, and he was you know, it's strange
• 53:45
  Speaker 1: because he was the only retail investor there and it
• 53:47
  Speaker 1: was really all about retail investors. They kind of asked
• 53:49
  Speaker 1: him some some pretty good juicy questions. Had they been
• 53:52
  Speaker 1: curious about it, but I think they were. They were
• 53:55
  Speaker 1: outraged that trading was halted and that that's a key
• 53:58
  Speaker 1: part of it. So let's talk about that. But we
• 54:00
  Speaker 1: will circle back to gil So right in the height
• 54:03
  Speaker 1: of this where the short squeeze is having maximum effect,
• 54:07
  Speaker 1: um Robin Hood is adding incredible numbers of new accounts,
• 54:13
  Speaker 1: offering incredible amount of margin to these new account holders
• 54:18
  Speaker 1: and a lot of option trading. Why did they halt
• 54:22
  Speaker 1: the most shorted squeeze stocks. They did because they did
• 54:27
  Speaker 1: too good of a job. That's basically that's they didn't
• 54:29
  Speaker 1: have the capital to meet their custodial agreements. They got
• 54:33
  Speaker 1: a call. And now we have more detail. By the ways,
• 54:35
  Speaker 1: the recently a report came out from this Congressional committee
• 54:38
  Speaker 1: very recently, very recently, good and a good report worth
• 54:41
  Speaker 1: reading that has a lot of detail that it was
• 54:43
  Speaker 1: actually much worse than than what we knew. They were
• 54:47
  Speaker 1: very close to going under. Not only that we knew
• 54:49
  Speaker 1: they were very close to going under, we didn't know
• 54:52
  Speaker 1: was how close they got to taking other people under.
• 54:54
  Speaker 1: Oh really, yes, who were they going to drag with them? Well,
• 54:57
  Speaker 1: Apex Clearing, you know, got into Trum, which was the
• 55:00
  Speaker 1: clear the clearing broker for lots of brokers and the
• 55:03
  Speaker 1: market makers who were processing the trades, and we're not gonna,
• 55:06
  Speaker 1: we're gonna stop processing these trades because you're gonna you're
• 55:10
  Speaker 1: going to create a problem for us. A Citadel which
• 55:12
  Speaker 1: was the biggest processor of their trades, and they got
• 55:14
  Speaker 1: they got into a conflict with Citadel Riff Shop in Chicago.
• 55:19
  Speaker 1: Now Miami. Yeah, Ken Griffin is a Hetgelow manager who
• 55:22
  Speaker 1: all his his holding company plays a role in this
• 55:25
  Speaker 1: because it it injected money into Cape Plotkin's fund after
• 55:30
  Speaker 1: he lost a bunch of money. But it also plays
• 55:33
  Speaker 1: a role in this because he is the major shareholder
• 55:35
  Speaker 1: in the securities from also called Citadel. That caused lots
• 55:39
  Speaker 1: of confusion and lots of conspiracy thinking that was a
• 55:41
  Speaker 1: really big beneficiary of this. But what people don't understand
• 55:45
  Speaker 1: is that this was a burden to them too, because
• 55:47
  Speaker 1: this this was a dangerous level of speculation in a
• 55:50
  Speaker 1: very narrow set of stocks. And you open a new
• 55:53
  Speaker 1: account on robin Hood, you put a thousand dollars in,
• 55:57
  Speaker 1: you buy two thousand dollars worth of stock, and if
• 55:59
  Speaker 1: it drops in half, somebody's gonna come up with that money.
• 56:03
  Speaker 1: And if you don't, someone else is on the hook.
• 56:06
  Speaker 1: Now they're adding like half a million accounts a week,
• 56:08
  Speaker 1: some crazy number. They added almost a million in a
• 56:11
  Speaker 1: day during this that's unbelievable. And yet all this is
• 56:14
  Speaker 1: algo driven, All this is automated. There is no real
• 56:18
  Speaker 1: adults saying we don't have the capital to extend. They
• 56:23
  Speaker 1: basically just it wasn't until they got the uh, the
• 56:27
  Speaker 1: founder of robin Hood what's name to rev ten of
• 56:32
  Speaker 1: its three in the morning, he gets a phone call,
• 56:35
  Speaker 1: we need three billion dollars in three hours or you're
• 56:38
  Speaker 1: out of business. Right three in the morning, West coast time,
• 56:40
  Speaker 1: West coast West Market's gonna open three hours. You need
• 56:44
  Speaker 1: three billion dollars or you're done. Yeah, even as hot
• 56:48
  Speaker 1: as things were in early one, you don't people don't
• 56:51
  Speaker 1: drop three billion dollars on you in three hours when
• 56:53
  Speaker 1: they're all asleep. Right, but he managed to actually get
• 56:56
  Speaker 1: just this, get this done between lines of credit and
• 57:00
  Speaker 1: in cash and then restricting all these meme stocks. Right,
• 57:04
  Speaker 1: they had about a seven million dollar line of credit
• 57:06
  Speaker 1: they drew down. They had already had seven million on
• 57:09
  Speaker 1: deposit at dt c C and then they said, how
• 57:13
  Speaker 1: about if we don't allow our customers to buy anymore,
• 57:17
  Speaker 1: these will only let them sell. And even then they
• 57:19
  Speaker 1: really bent the rules to keep them in business. And
• 57:22
  Speaker 1: so what people these if they blew up this Most
• 57:25
  Speaker 1: of this stuff wasn't systemic. But at that point, if
• 57:29
  Speaker 1: Robin blows up, maybe it's not the Great financial crisis,
• 57:33
  Speaker 1: but there are waves that are gonna gonna really have
• 57:35
  Speaker 1: negative effect, and their their customers were so angry at
• 57:39
  Speaker 1: not being able to buy these stocks. And what they
• 57:40
  Speaker 1: don't realize is had they been allowed to buy them,
• 57:43
  Speaker 1: not only they would have got not only were they
• 57:46
  Speaker 1: got lost a lot of money, because they would have
• 57:48
  Speaker 1: their money would have been locked up for weeks, by
• 57:49
  Speaker 1: which point it would have lost its value. But you
• 57:55
  Speaker 1: everything would have been frozen, you know, for weeks or
• 57:58
  Speaker 1: even months in robin hood, right, So they they would
• 58:01
  Speaker 1: have been wiped out, their vast majority. So let's bring
• 58:03
  Speaker 1: this back to Keith gil who when I are you're
• 58:07
  Speaker 1: going through the book and when you when you look
• 58:10
  Speaker 1: at the boards, he is described at separate times the
• 58:15
  Speaker 1: Reddit boards as he's a genius visionary. He's just a
• 58:19
  Speaker 1: guy who got lucky. He's an idiot who left generational
• 58:24
  Speaker 1: wealth changing amounts of money um on the table. What
• 58:30
  Speaker 1: was he really? So he was a very unusual person
• 58:33
  Speaker 1: to be in this group at all, Right, But the
• 58:36
  Speaker 1: fact that so people when they started getting excited about
• 58:40
  Speaker 1: game stop in the postile his short squeeze. Then he
• 58:42
  Speaker 1: was discovered. Then he became he went from being this
• 58:45
  Speaker 1: kind of laughing stock to being a celebrity. And his
• 58:47
  Speaker 1: post changed then to his posts were they were built
• 58:51
  Speaker 1: posts of memes and things like that. He was talking
• 58:54
  Speaker 1: about Ryan Cohen on his on his YouTube channel. People
• 58:58
  Speaker 1: still didn't know his identity, they didn't know his that
• 58:59
  Speaker 1: dead until um to Wall Street. Yeah, I know other
• 59:04
  Speaker 1: people could figure it out, I mean, like but until
• 59:06
  Speaker 1: two Wall Street. UH. Journal reporters interviewed him and published
• 59:10
  Speaker 1: the interview on the twenty nine, which is the day
• 59:12
  Speaker 1: after trading was was halted, twenty nine January, and it
• 59:15
  Speaker 1: was a great interview with him, iconic picture pictures of
• 59:18
  Speaker 1: my book, uh, the headband, the whole thing, and and
• 59:22
  Speaker 1: literally in the basement. In the basement, I spoke with
• 59:26
  Speaker 1: the photographer who was there taking the shots of him,
• 59:28
  Speaker 1: and I spoke with them of course, and there's a
• 59:30
  Speaker 1: lot of you know, things that fell to the cutting
• 59:32
  Speaker 1: room floor. So really fascinating story, all the kind of
• 59:35
  Speaker 1: this is the layer where he operated that you saw
• 59:37
  Speaker 1: on the YouTube videos and he became a hero. And
• 59:40
  Speaker 1: basically what he did, what was at that point, what
• 59:43
  Speaker 1: he was doing every day was just once a day
• 59:45
  Speaker 1: after the market closed, he posted a screenshot of his
• 59:49
  Speaker 1: v trade account, obviously not with his account number or
• 59:51
  Speaker 1: his name. UH and just the value of the options
• 59:54
  Speaker 1: he had in game stuff, and just the fact that
• 59:56
  Speaker 1: he hadn't sold. And people are like, if he's not selling,
• 59:58
  Speaker 1: I'm not selling. If he's in it, if he's and
• 1:00:00
  Speaker 1: I'm still in And when this this went from fifty
• 1:00:02
  Speaker 1: to a hundred back to sixty, people gave him grief.
• 1:00:06
  Speaker 1: And then it went to a million, and then down
• 1:00:08
  Speaker 1: to five hundred, and people gave him and then it
• 1:00:10
  Speaker 1: went to two four million, and suddenly we were off
• 1:00:14
  Speaker 1: to the races. Yeah, and it's called that's a concept
• 1:00:17
  Speaker 1: called social proof. You know, someone is making money doing something,
• 1:00:20
  Speaker 1: and you know, unfortunately they are like a lot of
• 1:00:21
  Speaker 1: people on the internet who have claimed to have or
• 1:00:24
  Speaker 1: actually have made money doing something, uh because they got lucky,
• 1:00:29
  Speaker 1: you know. But the fact that someone you know, it's
• 1:00:31
  Speaker 1: like when you turn on if you ever can't sleep,
• 1:00:33
  Speaker 1: and you turn on an infomercial and you see some
• 1:00:35
  Speaker 1: guy with like two blondes under each other in front
• 1:00:37
  Speaker 1: of an audience, in front of an audience, and a
• 1:00:39
  Speaker 1: bentley and his big house and it's probably not really
• 1:00:42
  Speaker 1: his bentley or his house, but whatever, right or right,
• 1:00:45
  Speaker 1: you know, but but that's you know that that is
• 1:00:48
  Speaker 1: a very well understood concept like somebody and someone just
• 1:00:51
  Speaker 1: like you, by the way, someone he an ordinary guy
• 1:00:54
  Speaker 1: who now doesn't have to work, and gee, we used
• 1:00:56
  Speaker 1: to have to worry about bills, Bob. But tell him
• 1:00:59
  Speaker 1: we bought Joe's system and now you know, flip real
• 1:01:03
  Speaker 1: estate and you got we're making fifty a week, you know,
• 1:01:06
  Speaker 1: and you know. And so that's that's what really hooks people,
• 1:01:09
  Speaker 1: is this sort of if they did it, that I
• 1:01:11
  Speaker 1: can do it too. The logic of that always annoys
• 1:01:13
  Speaker 1: me because I always want to say to the people,
• 1:01:17
  Speaker 1: if this was so lucrative, why aren't you doing it?
• 1:01:19
  Speaker 1: And why are you selling the how to? You know,
• 1:01:22
  Speaker 1: I get those when newsletters, Hey, why don't you just
• 1:01:25
  Speaker 1: raise some capital from friends and family and and manage
• 1:01:28
  Speaker 1: money this way if it's so lucrative. But it turns
• 1:01:31
  Speaker 1: out the value is in selling it to suckers, not
• 1:01:35
  Speaker 1: actually the underlying Although that said, Gil ended up three
• 1:01:40
  Speaker 1: million dollars ain't nothing. It's a reasonable amount of money
• 1:01:44
  Speaker 1: even before taxes. And he still has what's the latest
• 1:01:48
  Speaker 1: filing um in terms of games stop stock? What does
• 1:01:52
  Speaker 1: he own? It's around a hundred plus boxes. We're recording
• 1:01:55
  Speaker 1: this down from four sixty, but still he's got five
• 1:01:59
  Speaker 1: or ten million dollars worth the stock, maybe more than that. No,
• 1:02:01
  Speaker 1: really in the tens, in the tens of millions, I think,
• 1:02:03
  Speaker 1: you know, because it was thirty million as of April
• 1:02:07
  Speaker 1: one when it had fallen quite a bit, so I'd
• 1:02:09
  Speaker 1: have to look it up, but I mean it's it's
• 1:02:10
  Speaker 1: in the tens of millions. So he's he's a rich man.
• 1:02:13
  Speaker 1: I don't know if he sold or not, you know
• 1:02:15
  Speaker 1: he And by the way, just to say, like you know,
• 1:02:17
  Speaker 1: they're there are people who sort of are out there.
• 1:02:19
  Speaker 1: You're using social proof for manipulation. I don't think that
• 1:02:22
  Speaker 1: he ever manipulated anyone. You know, he was actually investigated personally,
• 1:02:26
  Speaker 1: the only people investigated in this whole thing, and totally cleared.
• 1:02:30
  Speaker 1: And and did you know he's not only a c
• 1:02:33
  Speaker 1: f A. He worked for a brokerage firm and insurance
• 1:02:35
  Speaker 1: company in his career, I think so. So he understood compliance,
• 1:02:39
  Speaker 1: he understood what he could and couldn't say. If you
• 1:02:42
  Speaker 1: look at all of his postings, he just showed his hey,
• 1:02:46
  Speaker 1: here's where this is today. There was no let's stick
• 1:02:49
  Speaker 1: it to the man, let's execute a squeeze, let's do.
• 1:02:53
  Speaker 1: It was just basically I love the phrase, I like
• 1:02:56
  Speaker 1: the stock. And you know, if he had wanted so,
• 1:03:00
  Speaker 1: you you had Elon Musk come into this, and and
• 1:03:02
  Speaker 1: other people and a lot of opportunitists come into this.
• 1:03:05
  Speaker 1: If he had said on that Monday or Tuesday or
• 1:03:07
  Speaker 1: Wednesday or any point thereafter, shown up and had a
• 1:03:10
  Speaker 1: screenshot of his trade account and said now I own
• 1:03:14
  Speaker 1: deep out of the money options in x y Z company,
• 1:03:17
  Speaker 1: everyone would have jumped into x y Z company and
• 1:03:19
  Speaker 1: he would have made a hundred times his money. He
• 1:03:21
  Speaker 1: although that would have been investigated. Maybe that would have
• 1:03:24
  Speaker 1: been investigated, but it probably would have been okay because
• 1:03:26
  Speaker 1: he's not saying hey boy, he's just he's just legitimately
• 1:03:28
  Speaker 1: showing said, oh yeah, I actually did own it. All
• 1:03:30
  Speaker 1: I did was tell people that I owned it, and
• 1:03:33
  Speaker 1: and he would have been able, which we see on
• 1:03:35
  Speaker 1: TV every day. People go on Bloomberg and CNBC and
• 1:03:38
  Speaker 1: they say, this is why we own the stock. There's
• 1:03:40
  Speaker 1: nothing illegal about that. Nope. And I don't think it
• 1:03:42
  Speaker 1: would have been illegal in his case either. Maybe he
• 1:03:44
  Speaker 1: would have faced some slap on the wrist, but he
• 1:03:46
  Speaker 1: could have made hundreds of millions dollars he could have made.
• 1:03:48
  Speaker 1: He could have been one of the you know, maybe
• 1:03:50
  Speaker 1: not the wealthiest people in America, but he could have been,
• 1:03:53
  Speaker 1: you know, close to a billionaire. I think just by
• 1:03:57
  Speaker 1: doing it a few times, just think about it, right,
• 1:03:59
  Speaker 1: I mean, just think to pick some option in some
• 1:04:01
  Speaker 1: obscure company and what X of your money? He already
• 1:04:05
  Speaker 1: had fifty million dollars in you know, in value. You know,
• 1:04:09
  Speaker 1: if if you had made multiply that get too hard, right, right,
• 1:04:16
  Speaker 1: even twenty x gets to a billion. The only issue
• 1:04:18
  Speaker 1: would be does the SEC step in and halt the
• 1:04:21
  Speaker 1: stock and prevent this from But it wouldn't. It just
• 1:04:24
  Speaker 1: would have been the truth I own the stock and
• 1:04:26
  Speaker 1: then just just the reaction alone. And you know that's
• 1:04:29
  Speaker 1: the you know, it's the less successfully is that what
• 1:04:33
  Speaker 1: people are doing every day on on TikTok, you know,
• 1:04:35
  Speaker 1: is that I bought the stock. And I think they're
• 1:04:37
  Speaker 1: still doing it on TikTok. I kind of got the
• 1:04:39
  Speaker 1: sense that the finance influencers on TikTok I love the
• 1:04:44
  Speaker 1: couple we only buy stocks that go up. If you know,
• 1:04:47
  Speaker 1: it's the old Will Rogers joke. If they don't go up,
• 1:04:50
  Speaker 1: don't buy them. That's that's how we support a lifestyle.
• 1:04:53
  Speaker 1: I kind of have got given the sense that here
• 1:04:56
  Speaker 1: at the end of the first half of two, with
• 1:05:00
  Speaker 1: the market down twenty plus percent, Uh, those influencers aren't
• 1:05:04
  Speaker 1: quite as influential as they previously were. Yeah, I think
• 1:05:07
  Speaker 1: the shine has come off a little bit, uh from
• 1:05:10
  Speaker 1: the bad financial advice, but you know, it just never
• 1:05:12
  Speaker 1: goes out of style and it comes back again and again.
• 1:05:14
  Speaker 1: But yeah, they definitely have um have become less influential,
• 1:05:18
  Speaker 1: of course, like anytime like I put something even if
• 1:05:21
  Speaker 1: it has nothing to do with crypto, and if you
• 1:05:23
  Speaker 1: have this, like you put something on Twitter and then
• 1:05:24
  Speaker 1: like somebody replies to you. It says, oh, I'm investing
• 1:05:28
  Speaker 1: with it just looks some normal looking person's picture. I'm
• 1:05:31
  Speaker 1: investing with so and so, my crypto coach. Like, you know,
• 1:05:34
  Speaker 1: there's just so much spot spam, right, and I you
• 1:05:38
  Speaker 1: know you should if you don't report and block those
• 1:05:41
  Speaker 1: you're you're doing. I do every time. I constantly do that.
• 1:05:45
  Speaker 1: Before we get to our favorite questions, my last question,
• 1:05:49
  Speaker 1: so the meme stocks, they're down about fifty six since
• 1:05:54
  Speaker 1: the peak, some even worse. Are we done with meme
• 1:05:58
  Speaker 1: stocks or is this just gonna be yet another one
• 1:06:01
  Speaker 1: of those things that sort of cycle in and out
• 1:06:03
  Speaker 1: of favor. So I think the meme stocks have chewed
• 1:06:07
  Speaker 1: up a lot of people's wealth and enthusiasm for the market,
• 1:06:09
  Speaker 1: So I think it's just gonna be you're having kind of,
• 1:06:13
  Speaker 1: you know, echoes of what you had originally. I don't
• 1:06:15
  Speaker 1: think that you could have what you had originally, but
• 1:06:17
  Speaker 1: you've had You've had some really dumb stuff go up,
• 1:06:19
  Speaker 1: Like you had red Box Entertainment that people who have those, right,
• 1:06:25
  Speaker 1: it was being bought for the equivalent of sixty four
• 1:06:28
  Speaker 1: cents and it went up to fifteen dollars just because
• 1:06:30
  Speaker 1: I don't know why, you know, right, I mean, and
• 1:06:32
  Speaker 1: stuff like that, Well they someone else would come along
• 1:06:36
  Speaker 1: and pay more, right, right, It's the greater full theory
• 1:06:38
  Speaker 1: to some extent. But it's also like L O L
• 1:06:40
  Speaker 1: this thing is going up. I'm gonna buy it, and
• 1:06:43
  Speaker 1: this serious person on TV said I shouldn't buy it
• 1:06:45
  Speaker 1: because it's worth a fraction of it, So I'm gonna
• 1:06:47
  Speaker 1: show him. I'm gonna buy more. And and another one
• 1:06:50
  Speaker 1: you mentioned, Revel, and that's a kind of crazy story
• 1:06:52
  Speaker 1: because they were was this before or after they filed
• 1:06:56
  Speaker 1: for back after after like like Hurts. That's oh, so
• 1:07:02
  Speaker 1: all the equity holders are known as zero? How do
• 1:07:04
  Speaker 1: I get me some of that? Right? I mean, it
• 1:07:07
  Speaker 1: just it just boggles the mind. Right, So you know,
• 1:07:10
  Speaker 1: there's no I mean, I think the only way to
• 1:07:12
  Speaker 1: explain it. I mean, obviously are people are not well informed.
• 1:07:17
  Speaker 1: But I think there are people who are just nihilistic
• 1:07:19
  Speaker 1: who are like, ha ha, look what I'm doing. I'm
• 1:07:20
  Speaker 1: burning up my money or I'm doing this thing where
• 1:07:23
  Speaker 1: I should I think so, I think psychologically that's like
• 1:07:25
  Speaker 1: that's also one outgrowth of the pandemic because people are
• 1:07:28
  Speaker 1: just saying, look at me, I'm doing this totally dangerous thing,
• 1:07:32
  Speaker 1: and maybe some of them are getting out. So a
• 1:07:34
  Speaker 1: lot of the people I spoke with who were involved
• 1:07:36
  Speaker 1: in this were more sort of the savvy playing the
• 1:07:40
  Speaker 1: greater fool. I see this thing going up, and I
• 1:07:42
  Speaker 1: think I'm gonna be able to hop and they mainly
• 1:07:44
  Speaker 1: just succeed. So I was looking at this entire reddit
• 1:07:48
  Speaker 1: wool Street bats Saga from from Game Stop to AMC two,
• 1:07:52
  Speaker 1: Hurts and now Revlon as just a massive combination of
• 1:07:58
  Speaker 1: board millennials suck at home with free trading and a
• 1:08:03
  Speaker 1: giant Dunning Krueger overlay. Meaning people are unaware of their
• 1:08:07
  Speaker 1: own lack of skills. And what you're suggesting is there's
• 1:08:11
  Speaker 1: a different dimension to this that burn the whole thing down.
• 1:08:15
  Speaker 1: What the hell this this isn't working, This experiment isn't
• 1:08:20
  Speaker 1: working out here in America. Just let it all burn.
• 1:08:23
  Speaker 1: Is that what you're suggesting that is part of it?
• 1:08:25
  Speaker 1: That definitely is part of it for some of the
• 1:08:27
  Speaker 1: people involved, for sure, and they they don't mind making
• 1:08:32
  Speaker 1: money in the process. It's like the George Costanza like,
• 1:08:35
  Speaker 1: just do the opposite of what right I mean? And
• 1:08:37
  Speaker 1: that's what like, oh, the smart person on TV, the
• 1:08:40
  Speaker 1: Spencer Jacob at the Wall Street Journal said, don't do that.
• 1:08:43
  Speaker 1: I mean, I'll write an article like pointing out for example,
• 1:08:45
  Speaker 1: I wrote an article about crypto and memestock saying like,
• 1:08:49
  Speaker 1: there's some people have a five thousand dollar price target
• 1:08:53
  Speaker 1: for a m C or I don't know how like
• 1:08:54
  Speaker 1: a million dollar price start for a bitcoin, and I
• 1:08:59
  Speaker 1: wrote about it's right there, it's not unthinkable. Well yeah,
• 1:09:05
  Speaker 1: and that's harder from is from twenty but still yeah, um.
• 1:09:10
  Speaker 1: But the thing that you have to realize that Victor
• 1:09:13
  Speaker 1: are going to give credit to uh Victor Hagani of
• 1:09:16
  Speaker 1: ELM Wealth who pointed this out. I mean it's kind
• 1:09:19
  Speaker 1: of common sense, but he actually studied, you know, and
• 1:09:23
  Speaker 1: kind of ran the numbers and and did scenarios, and
• 1:09:26
  Speaker 1: he said, if you are really sure, like you really
• 1:09:28
  Speaker 1: have a high degree of confidence. Uh, Like I just
• 1:09:31
  Speaker 1: went back to the Kelly betting criteria. That's something a
• 1:09:34
  Speaker 1: sports betting right exactly, it's study. I love this part
• 1:09:37
  Speaker 1: of the book. Yeah. And so if you if you
• 1:09:40
  Speaker 1: really really pretty confident in something happening, like you know,
• 1:09:43
  Speaker 1: you might be wrong, but let's say you really are confident,
• 1:09:45
  Speaker 1: you have reason to think you're confident, you don't bet
• 1:09:49
  Speaker 1: all your wealth. These people are going all in. People
• 1:09:51
  Speaker 1: are like I mortgage my house, I'm out on the street,
• 1:09:54
  Speaker 1: but I still am keeping my AMC because it's going
• 1:09:56
  Speaker 1: to five k. Like, if it's going to five hundred k,
• 1:09:59
  Speaker 1: how many what do you need? Two shares? Two shares
• 1:10:02
  Speaker 1: of AMC for twenty six bucks. And then if you're right,
• 1:10:06
  Speaker 1: then you're rich. And if you're wrong and there's not
• 1:10:09
  Speaker 1: a chance that you're right, then you know you didn't
• 1:10:13
  Speaker 1: lose a lot of money, and so it's like it's
• 1:10:17
  Speaker 1: bet uh. People end up going even knowing it's a
• 1:10:22
  Speaker 1: loaded coin, and I don't know if this is the
• 1:10:24
  Speaker 1: same STA. So even though it's a loaded coin, I
• 1:10:28
  Speaker 1: think if I don't lose money, my college math recollection
• 1:10:32
  Speaker 1: is that you should never bet more than like four
• 1:10:36
  Speaker 1: percent of your steak because you could have a run
• 1:10:40
  Speaker 1: of even with weighted coin of like eight ten in
• 1:10:43
  Speaker 1: a row, and then you're busted. Even with a sixty
• 1:10:46
  Speaker 1: forty coin, you would think, how can I lose money?
• 1:10:49
  Speaker 1: The vast majority of people completely go broke with that. Yeah,
• 1:10:53
  Speaker 1: it's which is crazy. Yeah, and there's been a lot
• 1:10:55
  Speaker 1: of studies showing that. But and this specifically, that's why
• 1:10:57
  Speaker 1: I wrote that, you know, which I thought was like
• 1:10:59
  Speaker 1: a kind of a smart thing to point out to
• 1:11:01
  Speaker 1: two readers is a common common sense. Then you get
• 1:11:03
  Speaker 1: the hate I get that, get the hate mail, screw you.
• 1:11:06
  Speaker 1: I'm still holding. I'm all in, like, Okay, I just
• 1:11:09
  Speaker 1: gave you I love. You don't have to. But by
• 1:11:11
  Speaker 1: the way, over the years, I have learned that the
• 1:11:14
  Speaker 1: more vociferous the hate mail, the more correct I am,
• 1:11:20
  Speaker 1: because the reason people are so upset is you're challenging
• 1:11:25
  Speaker 1: a fundamental belief system that they haven't thought through. And
• 1:11:30
  Speaker 1: you're essentially, I don't want to say, challenging their manhood,
• 1:11:34
  Speaker 1: but you're putting a fundamental principle that they adhere to
• 1:11:38
  Speaker 1: um at risk and it's confusing and their own cognitive
• 1:11:43
  Speaker 1: dissonance causes them to lash out. Maybe cognitive dissonance is
• 1:11:46
  Speaker 1: the wrong word, but the anger they get it means
• 1:11:49
  Speaker 1: you're you're getting closer and closer to totally identifying a
• 1:11:53
  Speaker 1: truth that is very uncomfortable to them. And I get
• 1:11:55
  Speaker 1: these like and you're a shill. Well, you know what,
• 1:11:57
  Speaker 1: I gave up a very lucrative job on Wall We
• 1:12:02
  Speaker 1: started out at Credit Swiss. You're an analyst. At one
• 1:12:04
  Speaker 1: point you were ahead of em research, right, So for
• 1:12:08
  Speaker 1: you to do be a reporter at the walls Ree Journal,
• 1:12:10
  Speaker 1: you're taking a pay cut. Yeah, that's try not to
• 1:12:13
  Speaker 1: think about that whenever, Like the kids need braces, and
• 1:12:16
  Speaker 1: it's not just it's not just that your chill. You're
• 1:12:19
  Speaker 1: just a bad chill, right, Exactly what kind of what
• 1:12:22
  Speaker 1: kind of a dummy makes a financial decision like that?
• 1:12:24
  Speaker 1: You're not gonna So let's let's um before we jump
• 1:12:28
  Speaker 1: to our favorite questions. It was one other study you
• 1:12:30
  Speaker 1: mentioned that I have to talk about because I just
• 1:12:32
  Speaker 1: love this. So this sports gambling. When people tweet their
• 1:12:39
  Speaker 1: sports forecasts about what's going to happen, the more specific
• 1:12:44
  Speaker 1: they are, and the more wrong they are, the more
• 1:12:48
  Speaker 1: followers they seem to get. The more specific, even if
• 1:12:51
  Speaker 1: they're wrong, they generate more Twitter followers. But people who
• 1:12:55
  Speaker 1: put out these thoughtful, nuanced forecasts that turn out to
• 1:13:01
  Speaker 1: be right, it doesn't generate that buzz that that the
• 1:13:06
  Speaker 1: certitude generates even if we're wrong. And that's a really
• 1:13:09
  Speaker 1: important thing to understand about finance and life general and
• 1:13:12
  Speaker 1: social media and social media. And then I'll just go
• 1:13:15
  Speaker 1: one step further on that because um, yeah, So basically
• 1:13:18
  Speaker 1: the study shows that people who are less accurate but
• 1:13:21
  Speaker 1: more confident, uh just a lot of certitude, get a
• 1:13:25
  Speaker 1: lot more followers than the people who wound up being right.
• 1:13:27
  Speaker 1: But in this algorithmically charge social media, you're not seeing
• 1:13:32
  Speaker 1: both of those posts anymore. Right, So you go on
• 1:13:36
  Speaker 1: on Reddit, which has a human algorithm, people upboat and
• 1:13:38
  Speaker 1: downboad things. Okay, so let's say Barry that you go
• 1:13:42
  Speaker 1: on on Wall Street bets and you have a very measured, long,
• 1:13:49
  Speaker 1: cerebral post about something with some good information and inside.
• 1:13:54
  Speaker 1: And then I go on there and you say, and
• 1:13:56
  Speaker 1: I put five percent of my portfolio into the stock.
• 1:13:58
  Speaker 1: And I go on there and I say, I put
• 1:14:01
  Speaker 1: a percent of my portfolio into the stock, all into
• 1:14:03
  Speaker 1: out of the money, call options, mortgage, my house, did
• 1:14:06
  Speaker 1: all this crazy stuff to the moon, you know, rocket ships,
• 1:14:09
  Speaker 1: I'm gonna get a lot more at tension. So now
• 1:14:11
  Speaker 1: a third person goes onto there and says, well, I'm
• 1:14:13
  Speaker 1: a young person who just to open up their first
• 1:14:16
  Speaker 1: brokerage kind of hear Wall Street pets is a place
• 1:14:18
  Speaker 1: to go for advice. Not only they It's not like
• 1:14:20
  Speaker 1: they're going to see your advice and my advice. They're
• 1:14:21
  Speaker 1: only going to see my advice. They're not going to
• 1:14:24
  Speaker 1: see your advice because yours is not going to get uploted.
• 1:14:27
  Speaker 1: Yours is boring and mine is exciting, And so mine
• 1:14:29
  Speaker 1: gets upvoted. Mine is funny and gets uploded in Yours
• 1:14:33
  Speaker 1: is invisible. And so this that that is different about
• 1:14:37
  Speaker 1: social media today. That's what you know people compared to yeah,
• 1:14:40
  Speaker 1: who finance message bar was usually did and this is
• 1:14:42
  Speaker 1: different that You're absolutely right, it's it's not just that
• 1:14:45
  Speaker 1: we're manipulated by algorithms. The algorithms are manipulating our own
• 1:14:50
  Speaker 1: biology and psychology, and so we were built for a
• 1:14:54
  Speaker 1: different era, not not this era. So on that cheerful note,
• 1:14:58
  Speaker 1: let's jump to our fine favor read questions that we
• 1:15:01
  Speaker 1: ask all of our guests, starting with tell us, what
• 1:15:04
  Speaker 1: you've been streaming these days? What's keeping you entertained? So
• 1:15:07
  Speaker 1: I have never been a big TV watcher, and then
• 1:15:10
  Speaker 1: during the pandemic, I guess I started more kind of
• 1:15:12
  Speaker 1: became more of like a family. Yeah, family social activity.
• 1:15:15
  Speaker 1: But I'll only except for I'll watch a football game
• 1:15:17
  Speaker 1: by myself. But I don't really watch things about myself.
• 1:15:20
  Speaker 1: So I always trying to, like, if I can get
• 1:15:22
  Speaker 1: three sons, if I can get at least one of
• 1:15:24
  Speaker 1: my sons and my wife to watch something with me,
• 1:15:26
  Speaker 1: then I'll watch it. It's like a matter of negotiations.
• 1:15:28
  Speaker 1: So the thing we just finished watching was Inventing Anna Um,
• 1:15:32
  Speaker 1: which I really liked and I'm I'm always just fascinated
• 1:15:36
  Speaker 1: by She's kind of the high in grifter, the socialite. Yeah,
• 1:15:40
  Speaker 1: she's the Anna delvi As was her name, and she
• 1:15:43
  Speaker 1: is her name. She's still alive, and she basically convinced
• 1:15:46
  Speaker 1: all these wealthy people to sort of finance her luxurious lifestyle,
• 1:15:50
  Speaker 1: and you know, and and she just she was a
• 1:15:53
  Speaker 1: fake heiress, you know. And and she almost got a
• 1:15:56
  Speaker 1: bunch of money from some investment firms to buy a
• 1:15:59
  Speaker 1: building and start foundation and all this crazy stuff. And
• 1:16:01
  Speaker 1: it's just it's just the kind of I'm really always
• 1:16:03
  Speaker 1: been interested in common. I want to watch UM, I
• 1:16:07
  Speaker 1: want to watch Super Pumped. I want to watch We Crashed.
• 1:16:09
  Speaker 1: I'm trying started. It's fascinating and I love the book
• 1:16:14
  Speaker 1: Super Pumped by your colleague, So that's definitely on my
• 1:16:18
  Speaker 1: list to see. And then on the podcast, I'm more
• 1:16:21
  Speaker 1: of a pod go for a walk, listen to podcast.
• 1:16:22
  Speaker 1: I listen to your podcast a lot. You're You're. I'm
• 1:16:25
  Speaker 1: a big fan of of yours. UM. I like Shane Parrish,
• 1:16:28
  Speaker 1: Dmitri Cofinis, Tim Ferris. UM. There's a guy actually I
• 1:16:32
  Speaker 1: heard on maybe just a few months back on Tim
• 1:16:34
  Speaker 1: Ferris who I'm really into listening town Rich Role who's
• 1:16:37
  Speaker 1: into like doing ultra endurance sports. I've just read his
• 1:16:41
  Speaker 1: book after I heard the podcast UM called Finding Ultra
• 1:16:45
  Speaker 1: was just this fascinating story about how he uh you know,
• 1:16:48
  Speaker 1: went from being uh in alcohol we still is an alcoholic,
• 1:16:51
  Speaker 1: but recover in culture marathon or is that who? Yeah,
• 1:16:54
  Speaker 1: like he did he did five iron Man's in seven days,
• 1:16:57
  Speaker 1: you know, yeah, in his forties. So he's one of
• 1:17:01
  Speaker 1: the fittest men in America. And so I listened to
• 1:17:03
  Speaker 1: a bunch of his podcasts. Now, so yeah, that's that's
• 1:17:05
  Speaker 1: the kind of thing that I listened to. And then
• 1:17:08
  Speaker 1: I like hardcore history a lot. Dan Carlin, that's an
• 1:17:11
  Speaker 1: interesting definitely an interesting pot. Let's talk about some of
• 1:17:14
  Speaker 1: your mentors who helped to shape your career. I feel
• 1:17:18
  Speaker 1: like I should mention, uh, somebody at the Financial Times
• 1:17:21
  Speaker 1: of the Wall Street Journal. And I've had a lot
• 1:17:23
  Speaker 1: of great editors. I have a great editor now great boss,
• 1:17:26
  Speaker 1: I should say, who runs the money in investing section.
• 1:17:28
  Speaker 1: But I'm gonna mention somebody who at the when I
• 1:17:31
  Speaker 1: spent a decade in finance and my boss for the
• 1:17:35
  Speaker 1: longest period of that time. Um, there's a guy who
• 1:17:39
  Speaker 1: really influenced me, taught me a lot. I think I've
• 1:17:42
  Speaker 1: worked harder for him. His name is John Conlin then
• 1:17:46
  Speaker 1: anyone I've ever worked for so hard. Yeah, he was
• 1:17:49
  Speaker 1: he became CEO of Robertson Stevens later, and uh yeah,
• 1:17:53
  Speaker 1: and he's just a really good guy. And just because
• 1:17:56
  Speaker 1: now I manage people, I manage a global team of
• 1:17:59
  Speaker 1: of columnists that hurt on the street, and you know,
• 1:18:01
  Speaker 1: I think, I think about the good bosses that I've had,
• 1:18:05
  Speaker 1: and then you know very much about him, about like
• 1:18:09
  Speaker 1: what they were like with me, and how to be
• 1:18:12
  Speaker 1: how to be decent to people, how to get people excited,
• 1:18:16
  Speaker 1: how to get make people really love coming into work.
• 1:18:19
  Speaker 1: I mean I loved working for him, and you know,
• 1:18:21
  Speaker 1: I just always felt like he had my back and
• 1:18:23
  Speaker 1: I learned a lot from him. But I mean, you know,
• 1:18:26
  Speaker 1: they're not that He's not smart. They were smarter people
• 1:18:29
  Speaker 1: I I encountered in my time in finance. But I
• 1:18:32
  Speaker 1: just just loved, you know, kind of being you know,
• 1:18:37
  Speaker 1: under under his wing. I was really sad, you know,
• 1:18:38
  Speaker 1: when he left and then he went to go work
• 1:18:40
  Speaker 1: for you know, Ron Roberts and Stevens, and was tempted
• 1:18:43
  Speaker 1: to go there really just because of him. So uh so,
• 1:18:46
  Speaker 1: he he had a big influence on me, really really interesting.
• 1:18:49
  Speaker 1: Everybody's favorite question, tell us what some of your favorite
• 1:18:53
  Speaker 1: books are and what are you reading right now? So
• 1:18:57
  Speaker 1: I just recently finished Bill Routers book, the second second book,
• 1:19:03
  Speaker 1: Freezing Freezing Order and the Red Notice was his first book. Um.
• 1:19:07
  Speaker 1: And actually because I was I worked in emerging markets,
• 1:19:09
  Speaker 1: I knew Bill a very little bit when he was
• 1:19:12
  Speaker 1: he's a little older than me, but so he got
• 1:19:14
  Speaker 1: started a few years before me. And this wild east
• 1:19:17
  Speaker 1: of eastern Europe. He was this before he founded his
• 1:19:19
  Speaker 1: firm A Mertage. But he his book is very important
• 1:19:24
  Speaker 1: book to read now, very entertaining book, both of those books,
• 1:19:27
  Speaker 1: but especially Freezing Order. You don't have to read the
• 1:19:29
  Speaker 1: first one if you read the second one about the
• 1:19:32
  Speaker 1: torture and murder of his lawyer, uh second Magnitsky, the
• 1:19:36
  Speaker 1: Mcgnitsky laws that he's passed, just sort of sees you'll
• 1:19:39
  Speaker 1: gotten gains from human rights abusers around the world, not
• 1:19:42
  Speaker 1: just in Russia. And this guy is he is such
• 1:19:45
  Speaker 1: a brave man. Um. You know, people have been been
• 1:19:49
  Speaker 1: murdered by Vladimir Putin for lesson. He's an outspoken advocate
• 1:19:53
  Speaker 1: for for justice in in Russia. And basically he just
• 1:19:56
  Speaker 1: shows you what Vladimir Putin's Russia is, which is a
• 1:20:00
  Speaker 1: it's a mafia state at the thugocracy with nuclear weapons
• 1:20:05
  Speaker 1: and poison and acts with impunity around the world. I
• 1:20:07
  Speaker 1: highly recommend that if Red Notice wasn't a nonfiction book,
• 1:20:12
  Speaker 1: it wouldn't get published as just too, if it was
• 1:20:15
  Speaker 1: a novel, would be this is too ridiculous. Yeah, I
• 1:20:18
  Speaker 1: don't think you've had him on She's coming up. We haven't. Okay,
• 1:20:22
  Speaker 1: I'm plowing through the new book, which is you know, horrifying.
• 1:20:26
  Speaker 1: It is. It is horrifying. It's he is. He is
• 1:20:29
  Speaker 1: a brave, brave guy to say, say the least, and
• 1:20:32
  Speaker 1: any other books you want to mention. Um, So I
• 1:20:35
  Speaker 1: read Blood well, bad Blood is great, great book. I
• 1:20:38
  Speaker 1: mean another book that I read a I read a book,
• 1:20:41
  Speaker 1: um recently one of your recent guests about Peter Teal
• 1:20:45
  Speaker 1: The Contrarian by Max Chaff enjoyed that. Also highly recommend
• 1:20:51
  Speaker 1: that book. Um, you know, interesting character, totally uh and
• 1:20:55
  Speaker 1: and such a complicated character. Yeah yeah, um, so yeah,
• 1:20:59
  Speaker 1: I read a lot of the I have a lot
• 1:21:00
  Speaker 1: of you know, friends and colleagues that that that write books,
• 1:21:04
  Speaker 1: and so I wounded up reading you know, I feel
• 1:21:06
  Speaker 1: like I have to read them, and so I read
• 1:21:07
  Speaker 1: a lot of those. But I read a lot of
• 1:21:08
  Speaker 1: history and biography to you know that that sounds really interesting. Um.
• 1:21:12
  Speaker 1: What sort of advice would you give to a recent
• 1:21:14
  Speaker 1: college grad interested in a career in either finance or journalism. Well,
• 1:21:21
  Speaker 1: I'll give you finance. Um. The way that I got
• 1:21:24
  Speaker 1: into finance was totally by accident. I was gonna, um,
• 1:21:27
  Speaker 1: you know, my I got an application to a program
• 1:21:33
  Speaker 1: at Columbia University that was not a finance program. Um,
• 1:21:36
  Speaker 1: and I got it by accident. Mentioned it to my
• 1:21:38
  Speaker 1: undergraduate advisory was still she's she's still she teaches Carol Savits,
• 1:21:41
  Speaker 1: she's still is on faculty at M I T. And
• 1:21:43
  Speaker 1: she told me like, oh, yeah, I went there and
• 1:21:45
  Speaker 1: you should do that. She kind of saw that I
• 1:21:47
  Speaker 1: probably shouldn't be an academic because I was planning on
• 1:21:49
  Speaker 1: being I didn't really have any the kind of temperament
• 1:21:51
  Speaker 1: for it. And uh, first or second day at this
• 1:21:54
  Speaker 1: program at Columbia University, UM, I met a kid who's
• 1:21:58
  Speaker 1: now fifty six year old kid who told me he
• 1:22:00
  Speaker 1: had been an investment banker. And I was like, you know,
• 1:22:02
  Speaker 1: I just didn't. My parents were immigrants here and there
• 1:22:05
  Speaker 1: their twenties. Nobody we knew was on Roall Street, and
• 1:22:08
  Speaker 1: I was like, excuse my ignorance, what's an investment bank? Like,
• 1:22:11
  Speaker 1: you know, I have heard the word, but I just
• 1:22:12
  Speaker 1: can you just explain to me, like a dummy what
• 1:22:14
  Speaker 1: it is? And but I was also very anxious about money.
• 1:22:19
  Speaker 1: You know, if you if your parents come here with nothing,
• 1:22:22
  Speaker 1: you that tends to be the case. And he's the
• 1:22:27
  Speaker 1: first thing he told me is how much he made,
• 1:22:28
  Speaker 1: which was all that got me right away. Yeah, I
• 1:22:31
  Speaker 1: popping in the eighties, you know, if working for bankers trust.
• 1:22:34
  Speaker 1: And I said, how do I do that? And he said, well,
• 1:22:38
  Speaker 1: you know you're I was bilingual and Hungarian and I
• 1:22:41
  Speaker 1: had studied German and Russia. And he said, they're going
• 1:22:43
  Speaker 1: to privatize everything. You Eastern Europe. The Iron curtain has fallen.
• 1:22:46
  Speaker 1: You know, you're you're there, they'll hire you. They're gonna
• 1:22:49
  Speaker 1: privatize everything. So just take as many finance classes as
• 1:22:52
  Speaker 1: you can at Columbia Business School you're allowed to in accounting,
• 1:22:55
  Speaker 1: and then you'll get hired. And he was right. And
• 1:22:57
  Speaker 1: I liked the finance classes. I like finance. I find
• 1:23:00
  Speaker 1: finance interesting. I never thought that I would, and I
• 1:23:03
  Speaker 1: really was. I'm fast. I'm still fascinated by it. I
• 1:23:06
  Speaker 1: think it's the most fascinating thing. It's it's like a
• 1:23:09
  Speaker 1: it's like my sports, you know, like just watching what
• 1:23:11
  Speaker 1: happens all these people sort of day a year struggle
• 1:23:16
  Speaker 1: over money and and people computing power and brains and
• 1:23:20
  Speaker 1: all this stuff. And so I liked it. But the
• 1:23:23
  Speaker 1: entire time that I worked in investment bank and I
• 1:23:25
  Speaker 1: was I think I was the youngest managing director and
• 1:23:27
  Speaker 1: the equity department in my my bank, Eventually, you know,
• 1:23:30
  Speaker 1: I felt like I'm just pinching myself. This can't this
• 1:23:33
  Speaker 1: is the amount of money that they're paying. They're paying
• 1:23:35
  Speaker 1: me like four or five times what my professors, you know,
• 1:23:38
  Speaker 1: who are much smarter than me. We're earning like this.
• 1:23:41
  Speaker 1: And I always like like, okay, I'll be maybe one
• 1:23:44
  Speaker 1: more year and so and then I in the end,
• 1:23:46
  Speaker 1: I I quit to become a writer. And you know
• 1:23:51
  Speaker 1: which is I'm glad that I that I did it
• 1:23:53
  Speaker 1: that way, because I think people, here's the lesson. Okay,
• 1:23:55
  Speaker 1: So that's that's the attitude you should have, is like
• 1:23:59
  Speaker 1: this is just totally unrealistic the amount the money you're
• 1:24:02
  Speaker 1: being paid. If you're a young person in finance, if
• 1:24:03
  Speaker 1: you want to need to make money or want to
• 1:24:05
  Speaker 1: make money, or want to have that cushion treated like
• 1:24:07
  Speaker 1: a cushion, don't go out and you know, bee frugal
• 1:24:10
  Speaker 1: treated like a stupid, stupid thing that you're being paid
• 1:24:12
  Speaker 1: so much, because it is stupid you're being paid so much.
• 1:24:15
  Speaker 1: And and don't get your ego wrapped up in it,
• 1:24:17
  Speaker 1: because I saw so many people I used to work
• 1:24:19
  Speaker 1: with eventually, you know, just have to go to a
• 1:24:23
  Speaker 1: less proceigious, less lucrative job, and it kind of really
• 1:24:26
  Speaker 1: really hurt them their egos. And don't ever think that
• 1:24:29
  Speaker 1: you deserve that amount of of money, you know, and
• 1:24:32
  Speaker 1: little humility goes a long way. And and just and
• 1:24:35
  Speaker 1: that that money gives you freedom, you know, so so
• 1:24:37
  Speaker 1: use it. I use the freedom to do this dumb
• 1:24:41
  Speaker 1: which I've been doing for almost twenty years now. And
• 1:24:43
  Speaker 1: I'm glad I did it worked out. I'm glad it
• 1:24:45
  Speaker 1: was in that order, you know what I mean. And
• 1:24:47
  Speaker 1: our final question, what do you know about the world
• 1:24:50
  Speaker 1: of finance and investing today? You wish you knew thirty
• 1:24:53
  Speaker 1: years or so ago when you were first getting started.
• 1:24:56
  Speaker 1: You know, I wish that I had just agonized over
• 1:24:58
  Speaker 1: things a bit less in term to invest in my
• 1:25:00
  Speaker 1: own money. Um, you have a colleague, but Julie, who
• 1:25:03
  Speaker 1: wrote a great book, Just keep buying, Just keep buying,
• 1:25:06
  Speaker 1: and that that is really the mantra, especially when you're
• 1:25:09
  Speaker 1: in your twenties and thirties and stuff like that. It's
• 1:25:12
  Speaker 1: when you're that age. And by the way, Nick is
• 1:25:14
  Speaker 1: barely thirty. I don't even think he's thirty yet, which
• 1:25:16
  Speaker 1: is astonishing how how much wisdom that book has for
• 1:25:22
  Speaker 1: someone as young as him. I wish that I had
• 1:25:24
  Speaker 1: had that wisdom at you know, because I've done fine.
• 1:25:26
  Speaker 1: But if I had just basically just done like literally
• 1:25:30
  Speaker 1: those three or it's just keep buying, don't worry about it,
• 1:25:32
  Speaker 1: don't keep checking, don't worry. You know, there have been
• 1:25:34
  Speaker 1: what forebear markets since I've been in like old enough
• 1:25:38
  Speaker 1: to have any money to invest. And if if you're counting,
• 1:25:42
  Speaker 1: this is the fourth one. Yeah, absolutely, two thousand oh
• 1:25:45
  Speaker 1: w O nine and yeah, and then the yeah. And
• 1:25:51
  Speaker 1: they had a couple of pullbacks in the nineties, but
• 1:25:53
  Speaker 1: nothing to I mean, I was always like, you know,
• 1:25:55
  Speaker 1: trying to handicap things and worry about things I just
• 1:25:57
  Speaker 1: really shouldn't have, you know, I mean that's take decades totally.
• 1:26:02
  Speaker 1: So that's that's very good advice, h really really good stuff.
• 1:26:06
  Speaker 1: We have been speaking with Spencer Jacob Wall Street Journal
• 1:26:10
  Speaker 1: reporter and editor and author of the book Which I
• 1:26:13
  Speaker 1: Have To Get Signs, The Revolution that Wasn't GameStop, Reddit,
• 1:26:17
  Speaker 1: and the fleecing of small investors. If you enjoy this conversation, well,
• 1:26:21
  Speaker 1: you can check out any of the previous four hundred
• 1:26:24
  Speaker 1: or so we've done over the past eight years. You
• 1:26:27
  Speaker 1: can find those at iTunes, Spotify, or wherever you get
• 1:26:30
  Speaker 1: your favorite podcasts. We love your comments, feedback and suggestions
• 1:26:34
  Speaker 1: right to us at m IB podcast at Bloomberg dot net.
• 1:26:39
  Speaker 1: Sign up from my daily reading list at rid Halts
• 1:26:42
  Speaker 1: dot com. Follow me on Twitter at rid Halts. I
• 1:26:45
  Speaker 1: would be remiss if I did not thank the crack
• 1:26:48
  Speaker 1: staff that helps put these conversations together each week. Sarah
• 1:26:52
  Speaker 1: Livney is my audio engineer, Attica val Bron is my
• 1:26:56
  Speaker 1: project manager. Sean Russo is my head of research. Riswald
• 1:27:00
  Speaker 1: is my producer. I'm Batty Hults. You've been listening to
• 1:27:04
  Speaker 1: a Masters and Business on a Bloomboat Radio